ICYMI - Goldman cuts US recession odds to 25% as Hormuz closure impact stays contained

Goldman Sachs cut its 12‑month US recession probability to 25% from 30%, citing resilient economic activity and financial conditions that have eased back below pre‑conflict levels despite a 10‑week Strait of Hormuz closure. The bank attributes the limited economic hit to muted oil price moves—thanks to high pre‑war inventories and market expectations—demand destruction alleviating refined‑product shortages (notably jet fuel), and supportive fiscal policy plus strong AI‑driven business investment. Goldman’s baseline assumes the Hormuz reopens gradually (completing by late June) and projects Brent near term to hold before falling to $90/barrel by year‑end. The revision should reassure risk assets, but Hatzius warns downside tail risks remain if oil prices spike or reopening is delayed, keeping a risk premium in markets.