This massive bank is now raising the recession odds as the total number of bankruptcy filings now surge by nearly 25%.
Economists at Goldman Sachs are now increasing the odds that the US economy will enter a period of an economic downturn by the end of the year.
Analysts at the banking giant have raised the odds of a recession occurring in the coming months from 15% to 25%, citing the rise in unemployment data, reports the Straits Times.
However, it’s not all doom and gloom.
Goldman Sachs says it believes that a timely Fed rate cut has the potential to help the US job market recover from its current state.
“The premise of our forecast is that jobs growth will recover in August and the FOMC (Federal Open Market Committee) will judge 25 basis-point cuts a sufficient response to any downside risks.
If we are wrong and the August employment report is as weak as the July report, then a 50 basis-point cut would be likely in September.”
The labor market is not the only sector feeling the impact of the Fed’s “higher for longer” approach to interest rates, reports the Daily Hodl.
“In a press release, US bankruptcy data provider Epiq AACER reveals that total bankruptcy filings in the country rose from 35,727 in July 2023 to 44,427 last month – a 24% increase,” reports the outlet.
Epiq AACER Vice President Michael Hunter made the following statement regarding the data:
“We continue to see a strong and steady rise in bankruptcy filings across the board, reflecting ongoing financial pressures faced by both businesses and individuals.
Based on current trends and economic indicators, I expect bankruptcy filing volumes to continue this steady increase throughout the remainder of 2024 and into 2025.”
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Also Read: Massive Banks Are Now Accused of Cheating Customers Billions
Other Economy News Today
Massive banks are now accused of cheating customers billions of dollars in interest payments according to financial reports.
According to a new report by Financial Times, several major Wall Street banks, including Wells Fargo, Morgan Stanley, and Bank of America, are accused of defrauding customers out of billions of dollars in interest payments.
The U.S. Securities and Exchange Commission (SEC) is currently investigating these banks to determine whether they intentionally steered clients toward “cash sweep” accounts that provided little to no interest earnings, despite the availability of higher-yielding options.
This alleged practice by the banks would amount to bilking customers out of significant sums of interest income that they should have rightfully earned on their deposits and cash holdings.
The SEC’s probe is aimed at uncovering whether this was a deliberate strategy by the banks to boost their own profits at the expense of their clients.
The report in the Financial Times highlights the concerning allegations of widespread misconduct by some of the largest financial institutions on Wall Street.
If substantiated, this could represent a major scandal involving the potential exploitation of customers through the mismanagement of their cash accounts and interest earnings.
The SEC’s investigation will be crucial in determining the full scope and nature of these alleged practices, as well as any potential enforcement actions or penalties that may be levied against the implicated banks.
The revelations have emerged from new Quarterly filings with the SEC.
In those filings, Wells Fargo says it’s in “resolution talks” with the agency over the issue, Morgan Stanley says the agency began asking questions about it in April and Bank of America confirms it’s currently being scrutinized.
All three banks have declined to comment on the matter.
Other financial firms involved in lawsuits related to cash sweep accounts include LPL Financial and Ameriprise.
LPL Financial says it plans to “vigorously” defend itself against the allegations, while Ameriprise has not released a public statement on the matter.
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Also Read: The US Treasury Direct is Now Freezing Customer Accounts
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