Goldman Sachs: Higher Treasury Yields to Slow US Growth, But Avoid Recession

Goldman Sachs economists say the surge in Treasury yields will slow US economic growth but not cause a recession.

Higher yields may reduce stock valuations, increase business failures, and spur deficit reduction efforts - each dampening growth modestly.

In total, Goldman estimates a 0.5 percentage point hit to GDP growth over the next year due to higher rates.

Other risks from higher yields are not large enough on their own to trigger a recession, unless occurring simultaneously.

Rate cuts by the Fed would offset much of the impact if adverse scenarios occurred.