Goldman Sachs note on their economic outlook:
Global Views: A Pothole, Not a Ditch
- We expect a pothole for US GDP growth in Q4—even if a government shutdown is ultimately averted—given factors including the student loan payment restart, the autoworker strike, higher oil prices, and tighter financial conditions.
- The weakness should prove short-lived, however, and our US view remains constructive, with only a 15% probability of recession over the next 12 months.
- While the EM early hikers are now mostly cutting rates, our baseline forecast is that the Fed, ECB, and BoE will keep rates at their current level until late next year.
- However, the risks are tilted to the downside, especially in the Euro area where Italian fiscal risk has resurfaced.
Does Italian risk ever go away?
This article was written by Eamonn Sheridan at www.forexlive.com. Source