New Delhi, Oct. 20 -- Persistently high bond yields could more than double their drag on US economic growth in 2027, while rising borrowing costs threaten to weaken business investment and test the resilience of financial markets, according to a report by Goldman Sachs.

The report estimated that higher interest rates would reduce US economic growth by around 0.2 percentage points in 2027 under its baseline scenario. If borrowing costs remain near current levels, however, the drag could rise to just over 0.5 percentage points, more than twice the baseline impact.

Goldman Sachs economists expect the US economy to grow close to its estimated potential rate of 2.3 per cent in 2027. However, the report cautioned that this outlook could face ...