Thursday, January 10, 2008

Goldman Sachs warns of imminent US recession

Goldman Sachs warns of imminent US recession
By James Quinn, Wall Street Correspondent
Last Updated: 1:26am GMT 10/01/2008



Goldman Sachs has become the second Wall Street bank this week to declare the US economy is headed for recession this year.

The bank's chief US economist, Jan Hatzius, argues that the latest economic data shows recession has now arrived in the world's biggest economy - or will shortly.

Hatzius, whose warning comes a day after economists at Merrill Lynch issued a US recession alert, added that the Federal Reserve will now cut interest rates from the current 4.25pc to as low as 2.5pc by the end of this year.

In a research note distributed to the bank's clients, Mr Hatzius said real gross domestic product would contract by 1pc on an annualised basis in both the second and third quarters....

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