Goldman Sachs economists put the chance of a recession for the U.S. during the next two years at 35 percent, citing overheated job market and history pattern in a Tuesday report.

The main challenge for the Fed is to narrow the gap between jobs and workers, and tame wage growth to meet its 2 percent inflation target. To achieve these goals, it will need to tighten financial policy to reduce job openings without causing a spike in worker lay offs, the investment bank said.

"While it's hard to say with precision, the jobs-workers gap needs to shrink by about 2.5 million (roughly 1 percent of the adult population in the U.S.) in order to cut wage growth from its pace of around 5 to 6 percent to about 4 to 4.5 percent," the bank estimates.

History suggests it's not easy to cool the labor market without causing the GDP to slump, Goldman Sachs economists said, while pointing out that the labor force is at its most overheated level in postwar history.

The tight labor market is increasing demands for wage increases to adapt to higher prices as the U.S economy confronts inflation running at a four-decade high.

The Fed signaled it will likely start culling assets from its $9 trillion balance sheet at its meeting in early May and will do so at nearly twice the pace it did in its previous "quantitative tightening" exercise.

(With input from Reuters)