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 raised the probability of a U.S. recession to 35% from 20% and said it expects more rate cuts by the Federal Reserve, as President Donald Trump's tariffs roil the global economy and upend financial markets.