Goldman Sachs Chief Economist said that despite the Fed’s aggressive rate hikes the US economy will avoid a recession. 

Goldman Sachs Economist Jan Hatzius said it was “very reasonable” that the US economy would avoid a recession. 

The bank kept the probability of the world’s largest economy going into recession in the next 12 months at 35 percent. This is below Wall Street expectations. 

According to Hatzius, the US economy can avoid recession with moderation in economic activity, a slowdown in nominal wage growth, rebalancing in the labor market, and inflation. 

Bloomberg’s survey conducted last month, recession expectations in the next 12 months had increased from 50 percent to 60 percent. 

Fed Chairman Jerome Powell stated that the US economy could avoid a recession, but he also noted that persistently high inflation reduces this possibility. 

According to Goldman, unlike the USA, the Eurozone and the UK will not escape the recession. Hatzius said that the downturn in the euro area would start in the last quarter of the year.