Investment bank Goldman Sachs has warned that U.S. President Donald Trump's sweeping new tariffs may spike inflation and shrink the economy in coming months to the point of a recession.

Goldman Sachs economists raised their forecast for Federal Reserve interest rate cuts to three this year and increased the probability of a U.S. recession to 35%, as President Donald Trump’s tariffs put pressure on economic growth.

The prospect of a radical escalation in the global trade war in the coming days has nearly doubled the probability of a recession in the U.S. economy in the next 12 months to around 35%, according to Goldman Sachs.

Goldman Sachs cut its S&P 500 target and raised its recession forecast. The bank now sees a 35% chance of a recession in the next 12 months.

David Solomon pointed to the country's 'huge, diverse, powerful economic engine' that can withstand shocks better than 50 years ago.

Goldman Sachs has revised its forecast for Brent crude oil's average price for the year, lowering it by 5.5% to $69 per barrel.

Goldman Sachs lowered its forecast for Brent crude's average price this year by 5.5% to $69 a barrel and for WTI prices by 4.3% to $66, citing the risks of higher OPEC+ supply and the global trade war triggering a recession.

Goldman Sachs Group Inc. expects the yen to climb to the low 140 levels against the dollar this year as jitters around US growth and trade tariffs bolster demand for the safest assets.

The US economy faces a growing risk of a recession as surging tariffs threaten to stunt growth, reignite inflation and lift unemployment, according to Goldman Sachs.

President Donald Trump has sounded more hawkish on trade in recent days after previously downplaying his plans for new tariffs set to be announced this week, according to a new report. It comes as Goldman Sachs (GS) economists have increased their forecasted odds of a recession over the next 12 months,