Investing.com -- Goldman Sachs has reduced its 12-month US recession probability by 5 percentage points to 25%, while maintaining expectations for below-trend growth and a rising unemployment rate.

The investment bank now anticipates the Federal Reserve will deliver two 25 basis point rate cuts in December 2026 and March 2027, a three-month delay from its previous forecast. The adjustment reflects lower recession risk and higher near-term core PCE inflation.

Goldman Sachs continues to expect the European Central Bank to implement two 25 basis point rate hikes in June and September 2026, followed by reversals in early 2027.

On China, Goldman Sachs noted the economy continues to grow at a solid pace, though the imbalance between strong goods production and weak domestic demand remains severe.