Still, the risk to Goldman’s global GDP forecast of 3.5 per cent for 2019 ‘is probably still on the downside.’
The case for a pickup from the current pace is strongest in the US as the drag from a tightening of financial conditions eases, according to Hatzius.
Goldman also sees tentative signs of a turnaround in Chinese growth, while urging investors to remain wary.
«The recent set of indicators looks more encouraging than the relentlessly negative news of prior months,» they wrote.
“It is hard to have confidence in a rebound at this point, partly because there are fewer obvious distortions and partly because the Lunar New Year holiday makes the Chinese data sparser and harder to interpret in January/February.”
Looking at markets, Goldman says it «sees a more bearish outlook» for the rest of 2019.
Some executives remain cautious. Jamie Dimon, chief executive officer of JPMorgan Chase & Co., used the bank’s annual presentation to investors to acknowledge a growing number of potential obstacles to the economy that carried his firm to record profits last year.
«We are prepared for a recession,» Dimon said. «We’re not predicting a recession. We’re simply pointing out that we are very conscious about the risks we bear.»
«We do believe there’s more room to run this cycle and we are optimistic global growth will stabilise,» JPMorgan Chase chief financial officer Marianne Lake said. Still, «recent declines in business sentiment have driven recessionary indicators higher. They are not flashing red, but they are off the floor.»
Goldman reckons Europe looks like the weakest major region, ‘with Italy in recession, Germany close to it, and most other economies growing at only about a trend pace,’ according to the note. Goldman has pushed back its expectations for the first ECB hike from late-2019 to mid-2020.
As for the Fed, Goldman says the prospects for moves in the next six to nine months have fallen and an increase toward the end of the year would require a rebound in both growth and core inflation.
It expects an announcement at the March meeting that the Fed will end balance sheet runoff later this year, probably in September.