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goldman sachs
A Week After Hiking Trump Recession Odds, Goldman Sachs Does It Again
"Trump and House Republicans are crashing the economy, raising your cost of living, and driving us toward a recession," said the chamber's top Democrat. "What happened to the so-called golden era of America?"
Apr 07, 2025
A week after Goldman Sachs raised the chance of a U.S. recession in the next 12 months from 20% to 35%, the Wall Street giant elevated it to 45% on Sunday, following President Donald Trump's worse-than-anticipated tariff announcement.
Goldman Sachs' note—tilted, Countdown to Recession—points to "a sharp tightening in financial conditions, foreign consumer boycotts, and a continued spike in policy uncertainty that is likely to depress capital spending by more than we had previously assumed."
The analysis is based on expectations that negotiations early this week will lead to "a large reduction in the tariffs" that Trump is set to impose on Wednesday. If that doesn't happen, Goldman's forecast is expected to change for the worse.
Since Trump's "Liberation Day" announcement last Wednesday, "at least seven top investment banks have raised their recession risk forecasts," Reutersnoted Monday, "with JPMorgan putting the odds of a U.S. and global recession at 60%, on fears that the tariffs will not only ignite U.S. inflation but also spark retaliatory measures from other countries, as China has already announced."
China initially responded to Trump on Friday with 34% import duties on all American goods. The U.S. president hit back on Monday, further escalating his trade war with the Chinese government by threatening to impose an additional 50% tariff. Citing a White House official, CNBCpointed out that "U.S. tariffs on China will total 104% if Trump's latest threat takes effect."
Trump wrote in a Truth Social post: "Additionally, all talks with China concerning their requested meetings with us will be terminated! Negotiations with other countries, which have also requested meetings, will begin taking place immediately."
Stocks have plummeted over the past week, and were "swinging Monday following a manic morning where indexes plunged, soared, and then sank again as Wall Street tossed around a false rumor," The Associated Pressreported.
"A White House account on X said a rumor circulating that Trump was considering a 90-day pause on his tariffs was 'fake news,'" the AP continued. "The intense and sudden moves show how hard financial markets are straining to see hopes that Trump may let up on his stiff tariffs, which economists see raising the risks of a global recession."
While progressive economists and working-class people have highlighted how Trump's "batshit crazy" tariffs are expected to impact everyday Americans—as the cost of the duties are passed on to consumers—many executives are also blasting the president's policy.
One respondent to a CNBC CEO Council survey called Trump's tariffs "disappointingly stupid and illogical," and said that "without faith that our government knows what it is doing, it is impossible for businesses to thrive."
According to CNBC, other CEO responses included:
- "This is the Trump recession."
- "Trump has imposed tariffs on component parts that are simply unavailable in the U.S. and never will be. He has surrounded himself with an incompetent cadre of yes men and women unable or unwilling to offer him cogent counsel."
- "We imagine that our suppliers will have to swallow part of the tariff, and we will have to pass on part of the tariff to our customers. We are controlling what we can control, pricing and sourcing decisions. We can't control the impact of tariffs on the consumer mindset, which we imagine could be significant."
Democrats in Congress also continued to call out the Republican president on Monday.
"Trump and House Republicans are crashing the economy, raising your cost of living, and driving us toward a recession,"
said the chamber's minority leader, Rep. Hakeem Jeffries (D-N.Y.). "What happened to the so-called golden era of America?"
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Chances of a Recession Hiked to 35% as Trump's 'Liberation Day' Tariffs Loom
"Don't use his term 'liberation day'! Call it Trump's devastating trade war! He has caused maximum uncertainty, likely to drive the U.S. economy to a near halt," wrote one economist.
Mar 31, 2025
As U.S. President Donald Trump gears up to unveil yet another round of tariffs this week and observers warn of potential "stagflation," the Wall Street giant Goldman Sachs on Sunday published a research note projecting that the chance of a recession in the next 12 months stands at 35%, up from 20%.
"The upgrade from our previous 20% estimate reflects our lower growth baseline, the sharp recent deterioration in household and business confidence, and statements from the White House officials indicating greater willingness to tolerate near-term economic weakness in pursuit of their policies," according to the research note.
Trump has previously said he plans to unveil a slate of reciprocal tariffs on April 2—a day he has dubbed "Liberation Day"—and on Sunday he said they would impact "all" countries to start. The announcement rattled financial markets globally on Sunday, and stocks continued to fall on Monday. The S&P 500 dropped by over 1% at the start of trading, and the index is on track for its worst month since September 2022, according to The New York Times.
"Don't use his term 'liberation day'! Call it Trump's devastating trade war! He has caused maximum uncertainty, likely to drive the U.S. economy to a near halt," wrote the economist and author Anders Åslund wrote on Bluesky on Saturday.
In the research note, Goldman Sachs analysts said they expect Trump's reciprocal tariffs to average 15% across all U.S. trading partners, though product and country exclusions may bring that average down.
Trump has already imposed blanket tariffs on China and blanket tariffs on traditional trade allies like Mexico and Canada, with some carve outs for certain goods. The administration has also enacted global aluminum and steel tariffs, and announced last week that it would impose 25% tariffs on autos and auto parts that are not produced in the U.S. The government will commence collecting the import tax on April 3.
Economists generally agree that tariffs—a tax on imports from other countries—are a cost that is largely passed on to consumers, though tariffs can be used to support domestic industries by promoting consumption of domestic-made goods.
In early March, U.S. Rep. Chris Deluzio (D-Penn.) penned an op-ed in the Times warning against "anti-tariff absolutism" on the grounds that they can be used as one part of a broader industrial policy to revitalize American manufacturing.
"Mr. Trump's tariff approach has been chaotic and inconsistent. There's no doubt about that. But the answer isn't to condemn tariffs across the board," Deluzio wrote.
Last week, United Auto Workers (UAW) president Shawn Fain, historically a Trump critic, praised the decision to impose auto tariffs.
"The UAW and the working class in general couldn't care less about party politics; working people expect leaders to work together to deliver results," said Fain in a statement. "We will work with any politician, regardless of party, who is willing to reverse decades of working-class people going backwards in the most profitable times in our nation’s history. These tariffs are a major step in the right direction for autoworkers and blue-collar communities across the country."
Meanwhile, Goldman Sachs also predicts higher inflation and lower gross domestic product (GDP) growth. Higher tariffs are likely to increase consumer prices, according to the analysts, who raised their yearend 2025 inflation forecast by 0.5 percentage points to 3.5%, above the Federal Reserve's target inflation rate of 2%.
Also as a result of tariff news and first quarter GDP data, Goldman Sachs has lowered its 2025 GDP growth forecast by 0.5 percentage points to 1%, when measured from the fourth quarter of 2024 to the fourth quarter of 2025. Also, the report's analysts now projects unemployment reaching 4.5%, a 0.3 percentage point increase from the previous forecast.
The Irish journalist and economic commentator David McWilliams warned in an opinion piece published Monday by Common Dreams that the "combination of a rapidly weakening economy and fear of inflation points to an old enemy not seen since the 1970s: stagflation, where unemployment and inflation rise together."
Other observers have also warned that stagflation could be looming.
"Launching chaotic trade wars with our allies and gutting Social Security, Medicaid, and other vital programs in order to fund tax breaks for his billionaire donors isn't making life more affordable for working-class families," said Alex Jacquez, the chief of policy and advocacy at the Groundwork Collaborative, in a statement earlier this month. "It is, however, a perfect recipe for stagflation."
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Sorry Stevie Wonder, We Do Need to Blame the Banks Responsible for the LA Fires
The four banks that sponsored the FireAid benefit concert were among the world’s largest fossil fuel industry financiers from 2016—when the Paris climate accord went into effect—through 2023.
Feb 14, 2025
Stevie Wonder was one of more than two dozen superstars who performed at FireAid, a six-hour benefit concert held late last month to raise money for Los Angeles wildfire victims and, according to event organizers, support “long-term initiatives to prevent future fire disasters throughout Southern California.” Viewed by more than 50 million people around the world, the benefit raised more than $100 million.
Before launching into “Love’s in Need of Love Today,” “Superstition,” and “Higher Ground,” Wonder called for unity in the face of the disaster. “In this world today, we have no time for blaming. We have no time for shaming,” he said. “We need to have prayer and come together as a united people of the world.”
Wonder was likely alluding to the thoroughly debunked lies uttered by then-President-elect Donald Trump, who falsely accused then-President Joe Biden, California Gov. Gavin Newsom, and Los Angeles Mayor Karen Bass of mismanaging resources.
If someone on the FireAid stage had remarked how ironic it was that JPMorgan and Goldman Sachs sponsored the event, 50 million people would have heard about the destructive role they are playing, probably for the first time.
Neither Biden, Newsom, nor Bass were at fault, but with all due respect to Mr. Wonder, it is long past time to blame and shame those who are truly responsible for fueling the climate crisis.
One could of course start with Trump, whose first administration rolled back or dismantled nearly 100 environmental safeguards and who—on day one of his new term—ordered federal agencies to begin gutting protections for the air, water, public lands, and the climate. Republican members of Congress, who have amassed 82% of oil and gas companies’ campaign contributions over the last two decades, are also to blame. And then there’s the fossil fuel industry itself, which was aware of the threat its products pose as early as 1954 but publicly denied the science for decades and funded disinformation campaigns to obstruct and delay government climate action.
Other responsible parties, notably banks and insurance companies, are less obvious. Paradoxically, a handful of them were among FireAid’s corporate sponsors, all of which presumably underwrote the concert to demonstrate their bona fides as caring, public-spirited companies. Joining American Express, Kaiser Permanente, and 20 other corporations were four banks—JPMorgan Chase, Goldman Sachs, UBS, and U.S. Bancorp—and a financial services company—Capital Group—whose investments undermine the concert’s goal of preventing future fire disasters. In fact, the tens of billions of dollars they collectively invest in fossil fuel-related companies annually will make fire disasters in Southern California—and everywhere else—more likely to happen.
Climate Change the ‘Main Driver’ of Wildfires
The science is clear, regardless of what Donald Trump may claim. Primarily caused by burning fossil fuels, climate change is the “main driver” of an alarming increase in wildfires in the Western United States over the last four decades, according to the findings of a 2021 study in the Proceedings of the National Academy of Sciences (PNAS) sponsored by the National Oceanic and Atmospheric Administration (NOAA).
“During 1984 to 2000, 1.69 million acres burned over 11 states,” NOAA’s PNAS study press release pointed out. “It doubled in size to [approximately] 3.35 million acres during 2001 to 2018. In 2020, the total annual burned area jumped to 8.8 million acres, more than five times of that in 1984 to 2000.”
“Even though wetter and cooler conditions could offer brief respites,” the press release added, “more intense and frequent wildfires and aridification in the Western states will continue with rising temperatures.”
A study published last November in Science Advances found that temperatures out West have indeed continued to rise since NOAA’s 2021 study, causing drought even when the region experienced normal precipitation due to moisture loss from “evaporative demand,” or atmospheric thirst. Once again, researchers predicted more severe, longer-lasting droughts covering wider areas as temperatures increase.
Just two months after the Science Advances study came out, Los Angeles County was engulfed in flames, prompting a multinational team of scientists at World Weather Attribution to produce a quick analysis. They found that, without a doubt, climate change “increased the likelihood of wildfire disaster in highly exposed Los Angeles area.”
The cost of that disaster was astronomical. A preliminary estimate of damages from the LA wildfires by AccuWeather ranged from $250 billion to $275 billion—more than the losses from the entire 2020 U.S. wildfire season. Other analysts estimate that the wildfires will cost insurers anywhere from $10 billion to $40 billion.
Burning Through Billions
The four banks that sponsored FireAid were among the world’s largest fossil fuel industry financiers from 2016—when the Paris climate accord went into effect—through 2023, according to the most recent “Banking on Climate Chaos” annual report, published by a handful of environmental groups in May 2024.
JPMorgan Chase: Although JPMorgan’s investment of $40.8 billion in fossil fuel, utility, and pipeline companies in 2023 was roughly half (in inflation-adjusted dollars) of what it invested in 2016, it is still the largest underwriter of fossil fuel deals. From 2016 through 2023, the bank—the largest in the United States—invested $430.9 billion (in unadjusted dollars), more than any other bank worldwide. Its top client was ExxonMobil, which received $15 billion, more than twice the $6.48 billion the bank poured into TransCanada Pipelines, its second largest investee.
Besides its relatively paltry donation for LA fire victims, JPMorgan is retreating from international efforts addressing the climate crisis.
Goldman Sachs: Goldman Sachs, which invested $184.9 billion from 2016 through 2023, was the 14th largest investor over that eight-year span. Its two biggest clients were the Saudi Arabian Oil Company ($4.38 billion) and Royal Dutch Shell ($3.2 billion). In 2023, Goldman Sachs invested $8.8 billion and was the fourth largest financier of fracking companies.
UBS: The Swiss-based UBS’s investments in fossil fuel-related companies dropped precipitously in 2023 to $8.8 billion, likely due to the bank’s dramatic profit swings, but between 2016 and 2023, it was the world’s 10th largest funder. Over those eight years, it invested $210.7 billion and was the biggest financier of metallurgic coal companies. UBS’s leading investee was Calpine Corporation, the largest U.S. natural gas and geothermal electricity provider, which received nearly $4 billion. Other top clients included Duke Energy ($3.25 billion); Parsley Energy, a natural gas developer ($3.4 billion); and Buckeye Partners, an oil pipeline company ($3 billion).
U.S. Bancorp:U.S. Bancorp—the fifth-largest U.S. bank—was the 28thlargest financier, investing $97.27 billion over the eight years covered by the “Banking on Climate Chaos” report. Among its top investees were Occidental Petroleum ($2.2 billion) and Devon Energy ($1.9 billion). In 2023, U.S. Bancorp invested $12.77 billion and was the ninth biggest financier of fracking companies. (Besides sponsoring FireAid for an undisclosed sum, the company—which has about 200 branches and 4,000 employees in the Los Angeles area—donated a meager $100,000 to the United Way of Greater Los Angeles to help fire victims.)
Capital Group: The fifth financial institution that sponsored FireAid,Capital Group, is one of the world’s largest asset managers. As of May 2024, it held more than $173 billion in shares and bonds in 162 fossil fuel-related companies, including ExxonMobil, Chevron, and Conoco Phillips, according to the 2024 report “Investing in Climate Chaos,” which did not document investments on an annual basis.
The Energy Transition Could Take ‘Generations’
JPMorgan, by far the worst of the five financial titans sponsoring FireAid, posed as a good corporate citizen by offering LA fire victims mortgage payment relief and donating $2 million to the American Red Cross, California Community Foundation, and United Way of Greater Los Angeles. But that’s chump change for a bank that posted a record $56.8 billion profit last year, a 19% increase from 2023.
Besides its relatively paltry donation for LA fire victims, JPMorgan is retreating from international efforts addressing the climate crisis. Just days before the bank announced its donation, it announced it was leaving the Net-Zero Banking Alliance, a United Nations-sponsored organization of more than 140 banks from 44 countries that have pledged to align their investments and loans with the goal of attaining net-zero carbon emissions by 2050. A year before, in February 2024, JPMorgan quit Climate Action 100+, a $68-trillion investor organization that advocates for reining in world’s largest corporate carbon emitters to reduce financial risk.
JPMorgan says it left CA 100+ because it hired its own climate risk analysts, but it walked away shortly after the investor group began requiring members to broaden their corporate disclosure and implement climate transition plans, according to ESG Dive, a trade journal. The bank did not cite a reason for leaving the Net-Zero Banking Alliance, but news outlets reported that Republican politicians had been pressuring banks to quit even before Trump, a notorious climate science denier, won the election last November.
A JPMorgan spokesperson promised that the bank would “continue to support the banking and investment needs of our clients who are engaged in energy transition and in decarbonizing different sectors of the economy.” And, to its credit, JPMorgan had already pledged to “finance and facilitate more than $2.5 trillion”—including $1 trillion for renewable energy and other “green initiatives”—by 2030 to “help advance long-term climate solutions and contribute to sustainable development.” In 2023 alone, the company invested $300 billion.
But the company remains the top fossil fuel industry financier and will continue to invest, regardless of the consequences. At a September 2022 congressional hearing, JPMorgan CEO Jamie Dimon, who made $34.5 million that year, was unequivocal. When asked if his company has a policy against funding oil and gas projects, he responded: “Absolutely not. That would be the road to hell for America.” More recently, in April 2024, the company issued a report warning that it will take “decades, or generations, not years” to phase out fossil fuels and hit net-zero targets.
Fossil Energy Companies Are ‘Hugely Important’
Goldman Sachs, the sixth largest U.S. bank, announced in December 2019 that it would no longer invest in oil development in the Arctic or in thermal coal mines worldwide, a first for a U.S. bank. It also said it would invest $750 billion in sustainability financing, which includes green energy, by 2030.
Environmental groups cheered, but stressed that the bank had a long way to go to align its investments to meet net-zero goals. It still does.
Like his counterpart at JPMorgan, Goldman Sachs CEO David Solomon rejects calls to sever his bank’s ties to the fossil fuel industry. “Traditional energy companies are hugely important to the global economy they are hugely important to Goldman Sachs,” he said in 2023, when he made $31 million, a 24% jump from the previous year. “We are all going to continue to finance traditional companies for a long time.”
Likewise, Goldman Sachs quit CA100+ (last August) and the Net-Zero Banking Alliance (last December). “We have made significant progress in recent years on the firm’s net-zero goals and we look forward to making further progress, including by expanding to additional sectors in the coming months,” the bank said when it departed the alliance. “Our priorities remain to help our clients achieve their sustainability goals and to measure and report on our progress.”
Name, Blame, and Shame
Last year was the hottest on record, beating out the next warmest year—2023. Meanwhile, the 10 warmest years since 1850 have all occurred over the last 10 years. In 2024, global temperatures exceeded the pre-industrial (1850 to 1900) average by 2.63°F (1.46°C), only slightly less than the Paris climate agreement’s ambitious goal of limiting the worldwide temperature increase to less than 1.5°C above pre-industrial levels to avoid the worst consequences of climate change.
The hotter it gets, the more likely such devastating events as the Los Angeles wildfires and Hurricane Helene will be decidedly worse. More neighborhoods will be wiped out. More people will lose their homes. More will die.
Regardless, the world’s largest banks have failed to keep their pledge to support the central aim of the Paris accord, according to a new report by research firm Bloomberg New Energy Finance. BNEF analysts calculated that the ratio of financing green energy and infrastructure relative to financing fossil fuel-related ventures must reach 4 to 1 by 2030 to keep any temperature rise below 1.5°C. Since 2016, BNEF found, banks have invested nearly $6 trillion in fossil fuels but only $3.8 trillion in green energy. That’s a trifling 0.63 to 1 ratio. For every dollar invested in fossil fuels, only 63 cents went to clean energy.
The banking ratio is only slightly better now. In 2023, it was 0.89 to 1, according to BNEF, a minor improvement over 2022, when it was 0.74 to 1. And for all that JPMorgan crows it invests in “green initiatives,” its energy-supply banking ratio in 2023 was a measly 0.80 to 1, and it is doubtful that the bank will start investing four times more in green enterprises than in fossil fuel companies anytime soon.
Regardless, JPMorgan, Goldman Sachs, and the other financial firms that sponsored FireAid and donated to local nonprofits aiding fire victims want to be seen as good guys. They correctly assume that the general public has no idea that their investments are ruining the planet. After all, the mainstream news media rarely, if ever, report on this topic, and the trade press that does is mainly read by industry insiders.
So no matter how heartfelt, Stevie Wonder—a celebrated humanitarian in his own right—was wrong. We should call out the people and corporations responsible for the climate crisis. If someone on the FireAid stage had remarked how ironic it was that JPMorgan and Goldman Sachs sponsored the event, 50 million people would have heard about the destructive role they are playing, probably for the first time. A column like this one, unfortunately, does not have that kind of reach.
This column was originally posted on Money Trail, a new Substack site co-founded by Elliott Negin.
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