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The ongoing trade war between the US and China is causing grave concerns among investors following warnings from global central banks and the IMF alike. Now, leading investment banks are starting to sound the alarms.
Over the weekend, US banking giant Goldman Sachs issued a note to clients warning them of the growing risk of a recession in the US. In the note, Goldman said that its forecast for the growth impact from the ongoing trade war has been lifted to a 0.6% drag on GDP from 0.2% prior. Analyst Jan Hatzius explicitly stated:
“Fears that the trade war will trigger a recession are growing,”
GDP Estimates Cut
Goldman also lowered its 4Q GDP estimate by 0,20%. The estimate now sits at 1.8% in light of the ballooning trade war. They noted:
“Overall, we have increased our estimate of the growth impact of the trade war… The drivers of this modest change are that we now include an estimate of the sentiment and uncerta...
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