Asked if a default or even a near default could cause a recession, Hatzius said yes. Still, Goldman Sachs is expecting a deal on the debt ceiling will be reached, eventually. “These solutions are often found at the very last moment.”Why Goldman Sachs says a recession isn’t comingAssuming the United States gets through the debt ceiling episode, Goldman Sachs is optimistic about the prospects for the US economy. Goldman Sachs expects the red-hot labor market will continue to cool down, but only gradually. The Goldman Sachs economist said his forecast is for the US economic expansion to continue through the 2024 presidential election, though that’s not a slam-dunk.

Source: CNN January 26, 2023 01:21 UTC