Goldman Sachs also sings a different tune from the Federal Reserve: It is expected that there will be only one more interest rate hike this year, lowering the probability of a US economic recession to 20%.

The latest interest rate expectations released by the Federal Reserve last month showed that most Fed policymakers expect two more rate hikes this year. However, Wall Street is increasingly skeptical of this expectation. Goldman Sachs' latest forecast is also diverging from the consensus. Jan Hatzius, Chief Economist at Goldman Sachs, said that although the Fed is expected to raise rates next week, this may be the last action in this round of rate hikes. Hatzius' report, released on Monday, also lowered the probability of a recession in the US economy in the next 12 months, reducing the likelihood of an expected recession from the previous estimate of 25% to 20%. The report stated that the downward revision of the recession probability is mainly due to recent data that has given Goldman Sachs more confidence in predicting that the Fed can bring inflation down to an acceptable level without causing a recession. The June US CPI released last week slowed down significantly more than expected, with year-on-year growth reaching a two-year low, and the core CPI excluding food and energy in June reaching a nearly two-year low. Hatzius believes that there are "strong fundamental reasons" to expect continued easing of inflationary pressures. The Goldman Sachs report predicts that economic growth will slow down to some extent in the coming quarters, mainly due to a slowdown in the growth of consumers' real disposable income, especially after student loan repayments resume from October. In addition, a decrease in bank lending will also drag down the economy. Goldman Sachs also pointed out that the relaxed financial environment, rebound in the real estate market, and continued strong construction of factories all indicate that the US economy will continue to grow, although at a slower pace than the trend level. After the release of the CPI last week, some Federal Reserve officials also made hawkish remarks. Christopher Waller, a Federal Reserve Board member who permanently holds voting rights on the Federal Open Market Committee (FOMC), said that he supports raising rates twice more this year to bring inflation back to target levels. Waller expects another rate hike after July, possibly in September or later. He stated that employment remains strong and the US economy is resilient, providing room for further tightening. However, until Monday of this week, the market still had a low probability of two more rate hikes this year. According to the Chicago Mercantile Exchange (CME) tools, the federal funds rate futures market on Monday predicted a probability of over 97% for a 25 basis point rate hike by the Fed in July. By the end of this year, the combined probability of at least two 25 basis point rate hikes is less than 23%.