Goldman Predicts US Recession Odds at 35% in 2 Years, John Mauldin Wouldn’t Be Surprised if Stocks Fell 40%

The U.S. economy continues to look bleak, and signals continue to emerge pointing to an impending recession. In a note sent out to clients this week, Goldman Sachs’ chief economist said that the bank believes that “the probability of recession is about 15% in the next 12 months and 35% in the next 24 months.” Moreover, renowned financial expert John Mauldin said he would not be surprised if the stock market collapsed by 40%, as he believes a recession is likely this year.

Goldman forecast: “Probability of recession next year – 15%, in the next 24 months – 35%.”

The U.S. economy is under significant pressure as supply chains are tight and consumer prices are rising amid the war going on overseas in Europe. Most recently, Bitcoin.com News reported last month’s consumer price index data, which showed that America’s inflation rate rose sharply to 8.5% in March.

A couple of days later, our newswire reported that hedge fund manager Michael Berry believes that the U.S. Federal Reserve has no intention of fighting inflation. Moreover, famous writer Robert Kiyosaki believes that hyperinflation and depression have already occurred.

In a note sent to investors this week, Goldman Sachs Chief Economist Jan Hatzius detailed Goldman’s forecast and the likelihood that the U.S. will fall into recession. Hutzius said the Federal Reserve has a “hard road to a soft landing,” and Goldman expects a 35 percent chance of a U.S. recession over the next two years.

“Our analysis of historical G10 episodes shows that while strong economic momentum limits risk in the near term, the policy tightening we expect increases the likelihood of a recession. As a result, we believe the probability of recession in the next 12 months is about 15% and 35% in the next 24 months,” Hatzius explained.

Hatzius went on to detail that historical patterns show that the economy could become rocky. He noted that 11 of the 14 economic cycles since World War II have resulted in recessions within 24 months. “Taken at face value, these historical patterns indicate that the Fed has a narrow path to a soft landing as it seeks to close the gap between jobs and workers and return inflation to its 2% target,” Hatzius added.

Bridgewater Associates founder Ray Dalio expects a “period of stagflation”

Goldman’s chief economist is one of many predicting a downturn in the U.S. economy in the coming months. Over the past few months, many financial analysts and economists have tried to predict the future of the U.S. economy.

So the Federal Reserve has tightened enough to adequately deal with inflation, and this is too much tightening for the markets and the economy. So the Fed will be in a very difficult position a year from now, when inflation will still be high and start to put pressure on both markets and the economy. I think we’re probably in for a period of stagflation. And then you will need to figure out how to build a portfolio that is balanced for those conditions.

Best-selling author and financial expert John Mauldin: “My instinct tells me it’s not going to be a 12-month wait.”

Renowned financial expert John Mauldin also predicts an economic downturnas he recently explained that he would not be surprised if the stock market collapsed by 40%. “[Fed Chairman Jerome] Powell and his team hope to stage a legendary soft landing,” Mauldin opined. “I very much doubt they will succeed,” he added.

Mauldin observed that 2-year Treasury yields recently exceeded 10-year Treasury yields, recording an inverted yield curve. “That’s the opposite of the norm. But then again, a lot of things have been the opposite of the norm lately,” Mauldin said. The financial analyst famously predicted the U.S. recessions that occurred in 2000 and 2008, and he believes these signs are no different. “We have a lot of signs that a recession is coming,” Mauldin’s blog said.The financial analyst’s blog concludes with the following:

There is absolutely no way to accurately predict when a recession will start. My instinct tells me it won’t be a 12-month wait. I think things will just keep slowing down, and one day we’ll look up and see a recession. And then a little later we’ll start rising again.Here’s how it all works.

What do you think of the projections for a possible recession in the United States. Do you expect an economic downturn in the near future. Let us know what you think about this in the comments section below.

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