Goldman Sachs has cut its S&P 500 (SP500) target for the second time this month as its economists raised their projection of a U.S. recession to 35%. “Higher tariffs, weaker economic growth, and greater inflation than we previously assumed” prompted Goldman to cut its year-end view to 5,

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.