Goldman Says Recession Near

Goldman Sachs (GS Quote) is saying it expects a recession in the U.S. this year and predicting that the Federal Reserve will continue decreasing interest rates in a bid to restore growth.

The firm said gross domestic product would shrink by 1% annualized in the second and third quarters of this year, meeting the generally accepted definition of a recession, which is two consecutive quarters of contraction.

For the entire year, GDP should increase by 0.8%, Goldman predicted. Because of the slowdown, the Fed will likely have to lower its fed funds target rate to 2.5% from the current 4.25%. ...