U.S. investment bank Goldman Sachs (GS) says that the new round of U.S. trade tariffs will lead to a “growth shock” in the global economy and prompt the U.S. Federal Reserve to cut interest rates more aggressively than previously forecast.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
“We view this as kind of a growth shock… this is going to be a hit to U.S. consumers,” said Ashish Shah, chief investment officer (CIO) of public investing at Goldman Sachs during a news conference held at the bank’s New York headquarters.
As market digest the implications of U.S. President Donald Trump’s new tariffs, Goldman Sachs said the economic outlook has gotten cloudy and that trade retaliation from other nations can be expected. However, despite the current turmoil, investors are sticking with U.S. stocks for now, said Marc Nachmann, global head of asset and wealth management at the Wall Street firm.
Silver Lining
Nachmann added that if there is a silver lining to be found in the current market volatility and economic uncertainty, it is that a dramatic slowdown in the U.S. economy will likely spur the Federal Reserve to cut interest rates more than previously expected. Futures traders are currently pricing in three 25-basis point rate cuts from the central bank in 2025.
Lower interest rates could help spur a recovery in equity markets later in the year, said Nachmann. His comments came on a day when stock markets around the world crashed after Trump announced a baseline tariff of 10% on nearly all imports into the United States. GS stock fell 9% on April 3 and is down 10% so far this year.
Is GS Stock a Buy?
Goldman Sachs stock has a consensus Moderate Buy rating among 15 Wall Street analysts. That rating is based on 10 Buy and five Hold recommendations assigned in the last three months. The average GS price target of $648.23 implies 26.84% upside from current levels.
