Goldman Sachs cut its U.S. recession probability to 25% on Tuesday, The Wall Street Journal reported.

The 25% probability is a far cry from the 35% forecast set by Goldman in March. from of Expected value is 65%. Goldman’s new forecast also diverges from the New York Fed’s forecast from April 2023, with probabilities set at: as high as 58%reported Business Insider.Goldman Sachs justified their forecast on the assumption that the Federal Reserve would only raise interest rates by 25 basis points. point Reuters reported in July.

in May job report According to the US Bureau of Labor Statistics, nonfarm payrolls rose by 339,000, a significant increase, even as the unemployment rate rose 0.3 percentage points to 3.7%.Strong labor market but recession fears remain if inflation continues over it Fed’s 2% target.

But Mark Zandy, chief economist at Moody’s Analytics, said: told CNN last Friday Or “[f]Or, given the number of jobs this year, it’s hard to imagine a recession. The odds of a recession this year are looking less and less. But Zandi said the odds of a recession over the medium term are one-third, and the odds of a recession in 2024 are rising to 50-50.

“We’re not in a recession. For the past two years people have been saying we’re in a recession. They’ve been wrong every day…. create jobs at this pace.” It is silly to use the r-word when@Justin Wolfers @CNN https://t.co/j5lLlkoyjL

— Carl Quintanilla (@carlquintanilla) June 5, 2023

Goldman and Zandy aren’t the only ones to see recession fears recede relative to the New York Fed’s projections. Morgan Stanley He also does not expect a recession in 2023 and expects the Federal Reserve to keep interest rates unchanged until 2024. Chief Global Strategist, JP Morgan Asset Management David Kelly said After the release of the jobs report, he said, “the odds of a soft landing are increasing.” (Related: ‘The stakes couldn’t be higher’: Biden celebrates bipartisan debt ceiling hike)

Federal Reserve Chairman Jerome Powell and the Fed have yet to release their views on rate hikes with the incoming Chairman. 5 meetings left This year it will be held from June 13th to 14th.

The debt ceiling debacle ended earlier this month with the Fiscal Responsibility Act.US economic growth stay positive After the first quarter, it was 1.3%.