The bank's economists over the weekend lowered their recession probability to just 15%, which chief economist Jan Hatzius classified as the "unconditional long-term average."
September's smashing nonfarm payrolls surge of 254,000 and a downward move in the unemployment rate served as a catalyst for the firm to nearly abandon the chance of a contraction.
Prior to the report, traders had been betting that the Fed might repeat its 50 basis point — half percentage point — interest rate cut from September before the end of the year.
But expectations have swung now, and Goldman concurs with market pricing that the "next few meetings" will see 25 basis point moves.
That's about 1.5 percentage points lower than the current level and 2 full percentage points below the pre-September cut.
Persons:
Goldman Sachs, Jan Hatzius, Hatzius, Goldman, Lisa Shallett, Morgan Stanley, Shallett
Organizations:
Labor Department, Federal Reserve
Locations:
U.S