wall street has gone from more than a year of worrying about a recession to thinking that one actually may not happen in recent days some prominent voices have voiced sentiment that even with a flurry of interest rate hikes  a weakening consumer and significantly tighter credit conditions the us can skirt a downturn it takes a lot of guts to bet against the us economy morgan stanley ceo james gorman told cnbcs leslie picker during a live  squawk on the street  interview that aired tuesday bank balance sheets are strong personal balance sheets are strong we are near the end of the rate increase period earnings have been generally a little more positive at this point the outgoing executive said it doesnt even matter much if the us hits a technical recession what matters is if you have a deep recession that changes the unemployment and thats not happening he said the no recession sentiment seems to be spreading goldman sachs has cut its recession probability outlook to 20 from as high as 35 at one point on the belief that the storm clouds forming over the domestic economy are beginning to break that has come even though the yield curve a telltale sign for recessions remains deeply inverted in early march we highlighted the risk that economic growth could improve in 2023 because of fading headwinds from monetary and fiscal policy tightening strong consumer income growth and a possible bottom in the housing and manufacturing sectors goldman economist spencer hill said in a client note while the spring bank failures seemed to reduce the odds of this outcome our review of official and alternative data suggests that this growth rebound may have happened anyway he added if so the strong growth momentum to start the third quarter will help offset the mounting drag from reduced bank lending which has stagnated in recent weeks to be sure goldman is not anticipating gangbusters growth the firm sees gdp rising at a 11 annualized pace in the second half of the year but it does see enough signs to wonder as stated in the title of hills note has growth picked back up that feeling is buoyed by a sharp pickup in domestic demand which is tracking at a 26 annualized gain in the second quarter the firm also noted signs that manufacturing which has been in contraction for months is finally bottoming hill also noted that home sales are no longer plummeting but declining gradually providing some hope for that sector of the economy though tuesdays retail sales report was a disappointment with the 02 monthly gain falling below the 05 consensus estimate most of the other data has been good in fact the citi economic surprise index which gauges actual readings against expectations is near its highest level since midmarch 2021 investors are still expecting the federal reserve to raise benchmark interest rates when it meets next week but gorman suggested that could be the last increase chicago fed president austan goolsbee is among those who think the economy can avoid a recession even with 5 percentage points worth of rate hikes since march 2022 in a recent cnbc interview goolsbee spoke of a golden path in which the central bank is going to going to succeed at bringing down inflation and to do that without a recession would be a triumph wall street professionals are grudgingly taking notice the bank of america global fund manager survey for july saw a shift in those expecting an economic downturn while 48 still see a global recession happening by the end of the first quarter in 2024 the number of those expecting no recession climbed to 19 a 5 percentage point increase from june finally those expecting a soft landing for the economy rose to 68 against just 21 of those who see a hard landing