Investment bank Goldman Sachs has warned that U.S. President Donald Trump's sweeping new tariffs may spike inflation and shrink the economy in coming months to the point of a recession.

A broad, negative impact will be felt in the economy when the new trade moves are enacted, the Goldman economic team believes.

The U.S. economy faces a sharply higher risk of recession over the next twelve months, Goldman Sachs analysts warned this weekend, as tariffs reduce growth, stoke inflation pressures and deepen the market's first quarter decline.