In a wild turn of events, Goldman Sachs has reversed its recession call, just hours after warning that Trump’s aggressive new tariffs could tip the U.S. economy over the edge.

The U-turn came after President Trump unexpectedly hit the brakes, announcing a 90-day delay on most new tariffs, giving global markets some breathing room—and giving Goldman reason to dial back the panic.

Now, the investment bank is calling for 0.5% GDP growth by the end of 2025, and thinks we’ll see three rate cuts from the Fed starting in June, according to a note shared via CNBC.

Markets: Massive Relief Rally

Markets wasted no time celebrating:

• Bitcoin shot up past $82K,
  
• The Nasdaq roared back almost 10%, undoing some of its worst losses since 2008,
  
• 10Y Treasury yields slipped from 4.5% to 4.4%.
  

Trump posted to Truth Social, saying the pause came after “positive trade and currency talks” with key allies. Reciprocal tariffs were scaled back to 10%, but the White House didn’t go easy on China—those tariffs jumped to 125% effective immediately.

Goldman: Still Cautious, But More Optimistic

Goldman now puts the recession odds at 45%, down from 60% just a few days ago. They expect core inflation to top out at 3.5%, which sets the stage for the Fed to start easing—a major plus for risk assets.

New Treasury Boss = Market Confidence

Also catching investor attention: Scott Bessent has been tapped as Treasury Secretary and will now spearhead trade talks. Wall Street knows Bessent as a cool-headed, market-savvy operator, and his appointment helped seal the sentiment reversal.

Bottom line? Trump’s delay may have bought markets time—and for now, the recession isn’t a done deal.