Goldman Sachs is now reportedly more bullish on a soft landing for the US economy, citing encouraging inflation data.
In a note on Monday, the bank’s chief economist, Jan Hatzius, put the odds of a recession in the US over the next 12 months at 20 percent, down from an earlier estimate of 25 percent, Business Insider reported.
“The main reason for our cut is that the recent data have reinforced our confidence that bringing inflation down to an acceptable level will not require a recession,” he wrote.
Though this is still above the postwar average of 15 percent, Goldman’s new outlook is well under the median forecast on Wall Street, currently standing at 54 percent.
The Federal Reserve’s aggressive rate hikes for more than a year raised fears that the central bank would sink the economy amid its fight to bring inflation down to its 2 percent target.
But the latest consumer price index showed inflation had cooled to a 3 percent pace in June, down from last year’s peak of 9 percent.
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