Don’t worry about stocks with the Fed closing in on its dream no-recession scenario, Goldman Sachs says

• Stocks have given up some of their gains in August, after starting 2023 on a tear.
• But investors shouldn’t fret about the declines, according to Goldman Sachs.
• There’s just a 20% chance of a recession and the Federal Reserve is closing in on its dream “soft landing” scenario, the bank said in a recent research note.

Stocks’ disappointing run in August is likely a short-term blip rather than a longer-term trend, according to Goldman Sachs.

In a note to clients seen by Insider, the bank restated its view that there’s just a 20% chance the US suffers a recession within the next 12 months – and said the Federal Reserve is closing in on a dream soft-landing scenario that will help equities rebound.