Economists at Goldman Sachs Group Inc. said the surge in U.S. Treasury yields to high levels in recent weeks will slow economic growth and increase financial risks, but they don’t expect a recession. I haven’t.
“Further tightening of financial conditions as interest rates rise means the drag on gross domestic product (GDP) will continue for longer,” Goldman economists David Mericle and Lonnie Walker wrote in a note to clients on Monday. I will,” he pointed out.
Goldman estimates that rising interest rates will reduce GDP by about 0.5 points over the next year. While significant, it is smaller than the impact of last year’s monetary tightening, calling it “too small to cause a recession.”
The yield on the 10-year US Treasury note has risen by about 70 basis points (bp, 1bp = 0.01%) since the beginning of September, and on the 6th of this month, it hit the highest level since 2007. The closing price on the same day was 4.80%, with most maturities remaining around 5%.
Messrs. Mericle and Walker pointed out that “the transition to a high interest rate environment” poses a variety of risks. “These risks are unlikely to be enough to trigger a recession unless they occur suddenly, on a large scale, or simultaneously. Even if a bad scenario were to occur, the Federal Open Market Committee (FOMC) rate cuts would be “It will offset much of that impact.”
Original title:Goldman Says Yield Surge to Hit US Growth But Still No Recession(excerpt)
2023-10-09 13:52:46
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