IS America Walking into a Trump inspired Recession?

The alarm bells HAVE been ringing since one Donald Trump got sworn in….

They ARE Ringing Even LOUDER Now….

Goldman Sachs is sounding a cautious note on the U.S. economy, raising its inflation forecast and trimming its growth outlook in response to surging oil prices caused by disruptions to the Strait of Hormuz. But even as recession risks climb, most of Wall Street’s base case remains slower growth — not an outright downturn.

In its weekly U.S. economics update published on Tuesday, Goldman said it now expects Brent crude to average $105 per barrel in March and $115 in April before retreating to $80 by year-end, assuming roughly six weeks of Hormuz supply disruptions. On the back of that revised oil outlook, the bank raised its headline PCE inflation forecast by 0.2 percentage points to 3.1% by December 2026 and nudged its full-year GDP growth estimate down to 2.1%. Goldman also raised its recession probability by 5 percentage points — to 30% — while stressing that a recession is still not its base case.​

One relative reassurance: Goldman does not expect the oil shock to durably unhinge inflation expectations. Even major energy shocks in recent history did not produce lasting shifts in where consumers and businesses expect prices to settle, the bank noted, though it flagged post-pandemic inflation psychology as a risk worth watching.​….

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The war will push U.S. inflation above 4 percent this year, according to a new forecast.

The war in Iran will lead to a surge in inflation this year, as the closure of the Strait of Hormuz pushes up prices for oil, gas and other commodities, the Organization for Economic Cooperation and Development said on Thursday.

The inflation rate in the United States will average 4.2 percent this year, more than one percentage point higher than the group’s previous forecast, made late last year, the Paris-based organization said. Across the Group of 20 nations, inflation is forecast to average 4 percent this year, 1.2 percentage points higher than previously expected…

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In the United States, growth momentum from the beginning of this year is expected to be offset by a slowdown in consumer spending. At the same time, the impact of higher energy prices will outweigh the effect from lower tariff rates on imports. The jump in inflation narrows the chances that the Federal Reserve will be able to cut interest rates this year….