Goldman Sachs has reversed its recession forecast after President Donald Trump announced a 90-day pause on most of the administration’s new tariffs, calming markets rattled by trade war fears.

Earlier Wednesday, Goldman analysts shifted to a recession baseline following the rollout of new country-specific tariffs. But after Trump’s announcement, the firm updated its outlook to a “non-recession baseline,” projecting modest GDP growth of 0.5% by Q4 2025 and three expected Fed rate cuts starting in June, according to CNBC reporting.

Markets responded quickly. Bitcoin surged past $82,000, and the Nasdaq approached a 10% gain, recovering from its worst multi-day performance since the 2008 financial crisis. The 10-year Treasury yield eased from 4.5% to 4.4%.

Trump, posting on Truth Social, said multiple countries had initiated talks over trade and currency, prompting the tariff pause and a temporary reduction of the reciprocal tariff rate to 10%. However, tariffs on Chinese imports were raised to 125%, effective immediately.

Goldman now estimates a 45% chance of recession and expects core inflation to peak at 3.5%, according to its latest client note.

The surprise move came after four days of intense market volatility and mounting fears of a global recession. Treasury Secretary Scott Bessent will now lead upcoming trade negotiations, a shift Wall Street views positively due to his moderate stance.