Goldman Sachs’ chief U.S. economist presented a macroeconomic outlook for trustees that emphasized three policy shifts shaping the near‑term U.S. economy: large tariff increases, a front‑loaded fiscal package and tightened immigration policies.

The economist said the tariff increases implemented this year are unusually large and, in isolation, could subtract roughly one percentage point from GDP at their peak because tariffs act like a tax that raises consumer prices and lowers real income. He cautioned those tariff costs are sometimes borne initially by U.S. businesses but can be passed to consumers over time, increasing core inflation in the months ahead.

On immigration, the presentation noted a sharp decline in net arrivals from a 2023 peak and projected a stabilized pace of roughly 0.5 million per year under current policy—well below pre‑pandemic norms. The economist said lower immigration reduces labor supply and housing demand and will weigh on potential GDP growth.

Combining tariff effects, lower immigration and a modest fiscal growth impulse, Goldman’s baseline in the presentation was for calendar‑year growth closer to about 1.3–1.4% in 2025 (below potential) and an elevated 12‑month recession probability near 30%. The economist said he still expected the Federal Reserve to cut rates, forecasting a series of cuts starting in September and guiding the funds rate toward a neutral level around 3% over time, but noted the Fed’s path depends on whether inflation moves higher because of tariff pass‑through.

Trustees asked about deregulation and the long‑term competitiveness of the U.S.; the economist said deregulation has not historically produced large near‑term investment booms and that U.S. leadership in technology and productivity contributes to continued relative strength.

Trustees also questioned implications for long‑term interest rates; the economist said persistent fiscal deficits could put upward pressure on long‑term yields if markets demanded higher compensation for expanded public debt, but forecast moderate declines in the 10‑year if the Fed proceeds with the cuts he expects.