Goldman Sachs is warning that the current market calm may be short-lived. Goldman sees a 45% chance of U.S. recession and expects the Fed to remain reactive—waiting on labor market deterioration before acting. If job losses pick up, the Fed could cut rates aggressively, by 2% or more. Goldman also argues the dollar’s weakness is no blip.

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Years of over-allocation into U.S. assets, held largely unhedged by global investors, may now reverse. With real dollar value still historically high, Goldman sees room for a multi-year, 25–30% depreciation—especially if foreign demand for U.S. assets wanes. This is good news for U.S. exporters, as it makes their goods more competitive and desirable. But it's bad news for U.S. consumers and importers as buying power erodes.