Wall Street is cutting its forecasts for the US economy this year, boosting its projections for inflation and unemployment and nudging up the odds of a recession as the impact of the Iran war starts to come into view.
Goldman Sachs Group Inc. says the risk of a downturn over the next 12 months has risen to 30% as a result of the surge in oil prices, and predicts the jobless rate will climb to 4.6% by the end of 2026 from 4.4% in February. Several firms say inflation will now be closer to 3% this year than 2%, eating into disposable incomes and keeping a lid on hiring.