Goldman Sachs initially raised the possibility of a recession but later revised its forecast downward. The change came shortly after President Trump announced a suspension of most tariffs. The bank now predicts a 45% chance of an economic downturn within the next year. This fluctuation in recession forecasts is attributed to the uncertainties stemming from the ongoing trade war. Despite Trump's announcement of a 90-day tariff pause, some tariffs still remain in place, including a 10% across-the-board tariff.

Goldman Sachs had increased the likelihood of a recession multiple times before eventually lowering it back to 45% in light of the tariff developments. The bank had earlier raised concerns about a potential recession if the new tariffs were imposed. The market reacted strongly to Trump's tariff pause, with stocks experiencing significant gains following the news.