Goldman Cuts Recession Odds To 10% From 25%, Despite Expecting Big Slowdown In Payroll Gains

In a note published earlier today (available to pro subs), Goldman chief economist Jan Hatzius writes that "the agreement between the US and Iran has reduced the downside risks to our economic outlook." As we reported last week, the bank's commodities strategists now see Brent at $80 per barrel by the end of 2026, the second price target cut in a week. That said, Goldman still sees two-sided risks for the price of oil: on the upside, Iran's announcement on Saturday that the Strait was closed again served as a reminder that oil flows might only recover slowly. On the downside, a near-term glut could develop as oil is released quickly into a market that was already oversupplied before the war. More importantly, the agreement has prompted Goldman to cut its 12-month US recession risk estimate further from 25% to the long-term norm of 15% (below the bank's 20% estimate on the eve of the war "because the labor market improvement since then indicates greater underlying resilience.")