0746 GMT - The probability of a U.S. recession in the next 12 months has fallen, Goldman Sachs says in a note, citing optimism from the de-escalation in U.S.-China. trade tensions. The bank's economists lowered the odds of a recession to 35% from 45%, noting their recent agreement will result in a slightly smaller increase in the effective tariff rate than expected. The Trump administration looks likely to announce other preliminary trade deals over the next few weeks, which could further lower the U.S. effective tariff rate, they add. Given the trade developments and meaningful easing in financial conditions over the past month, Goldman raises its 2025 U.S. growth forecast by 0.5 percentage point to 1.0%, and pushes back the expected start of Fed rate cuts to December from July. (kimberley.kao@wsj.com)

(END) Dow Jones Newswires

May 13, 2025 03:46 ET (07:46 GMT)

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