According to reports, Goldman Sachs (Goldman Sachs) strategists said on Monday (4th) that the U.S. economy is in recession and is not included in Goldman Sachs’ “base case” expectations.
Goldman Sachs global fixed income master strategist Gurpreet Gill said in an interview that the Federal Reserve (Fed) monetary tightening is likely to continue, and the United States is more likely to experience a technical recession, that is, real gross domestic product (GDP) two consecutive Season shrinks.
“When you think about the investment landscape and investment opportunities in fixed income, it’s really important to pay attention to the size and nature of the recession,” Gill said.
Gill sees job growth forecasts remaining flat as central banks raise interest rates to curb inflation. The Fed raised interest rates by 3 yards in June and raised its benchmark rate to 1.75% from 1.5%, the largest increase since 1994.
Gill said central banks are trying to control the extent of the labor market slowdown. They want to soften the job market and allow companies to cut back on new employee hiring plans, but not necessarily through mass layoffs.
Federal Reserve Chairman Jerome Powell said at the end of last month at the European Central Bank’s annual monetary policy meeting that the U.S. economy was in a “robust state” and that the central bank could reduce inflation to 2 percent while maintaining a stable labor market and avoiding Achieving a “soft landing” target in a recession, although the task has become increasingly challenging in recent months.
Powell believes that the U.S. economy can withstand tightening monetary policy, and said raising interest rates without triggering a recession is the Fed’s goal and believes there are ways to achieve it. In addition, Powell also reiterated his remarks after raising interest rates by 3 yards last month, suggesting that when they meet in late July, they will consider raising interest rates again of the same scale, or raising interest rates by two yards.