A recession in the U.S. economy is not the baseline scenario of experts at Goldman Sachs Group Inc. (NYSE:GS), Gurpreet Gill, who is in charge of global fixed income strategy at the bank, said on Bloomberg Television. Monetary tightening in the U.S. is likely to continue, and a technical recession, that is, a decline in GDP within two quarters, is possible, Gill said.

“However, what really matters when we think about the investment landscape and opportunities for investors in the fixed income market is the magnitude of the recession and the individual characteristics of the recession,” she said. The tightening of monetary policy by global central banks to curb inflation will also dampen job growth, she said.

“Central banks are trying to achieve a slight weakening of the labor market. They want companies to start cutting back on hiring plans, but that doesn’t mean large-scale layoffs,” Gill noted.

As reported, the Federal Reserve raised the benchmark interest rate at its June meeting by 75 basis points immediately, to 1.5-1.75% per annum. Chairman of the Federal Reserve Jerome Powell did not rule out the possibility of raising it by the same amount and at the July meeting.