Goldman Sachs Sees H2 Growth at "Stall Speed" 1.25-1.75%, Raises Recession Odds to 30%
Goldman cut its full-year 2026 GDP forecast to 2.1% and sees second-half growth sliding to just 1.25-1.75%, what the bank calls "stall speed." Third upward revision to recession probability this year, now at 30%. Chief economist Jan Hatzius points to the oil shock, fading fiscal support, and hiring near breakeven levels. Unemployment expected to climb to 4.6%. The bank still sees a 70% chance of avoiding recession, backed by expected rate cuts later this year.
This fits the MCO structural read almost perfectly. Our analysis flagged the corrective phase in equities before the news caught up. Goldman is now three revisions in and still not calling it a recession, but the direction is clear. Stall speed growth with Brent at $95.20 and a Fed that can't ease is the exact environment where counter-trend rallies in equities fail. The S&P bouncing off 6,817 looks like exactly that. Until GDP momentum reverses or the Fed opens the door to cuts, the path of least resistance for risk assets remains lower.
Goldman Sachs Sees H2 Growth at "Stall Speed" 1.25-1.75%, Raises Recession Odds to 30%
Goldman cut its full-year 2026 GDP forecast to 2.1% and sees second-half growth sliding to just 1.25-1.75%, what the bank calls "stall speed." Third upward revision to recession probability this year, now at 30%. Chief economist Jan Hatzius points to the oil shock, fading fiscal support, and hiring near breakeven. This fits the MCO structural read almost perfectly. Stall speed growth with Brent at $95.20 and a Fed that can't ease is the exact environment where counter-trend rallies in equities fail. The direction of travel matters more than the number.
