Goldman Sachs Group Inc. CEO David Solomon said Tuesday he smainly expecting a recession in the coming months, as interest-rate hikes and inflation continue to let the air out of what is now a strong economy.
Solomon said he feels strongly about the positive potential of the underlying blockchain technology that allows digital transactions, but he did not express any optimism about the viability of cryptocurrencies after the bankruptcy of FTX.
He said that cryptocurrencies that people speculate on are completely uninteresting.
While many companies and clients continue to do well, he said that the outlook for 2023, with its projected geopolitical uncertainty and interest-rate hikes by the Fed, is leaving Goldman Sachs and its clients more cautious.
Solomon said in his appearance at the Wall Street Journal's CEO Council Summit in Washington, D.C. We are going through the process of thinking about how we're going to do that. We will have to narrow our footprint a bit. The economists at Goldman Sachs are forecasting 1.9% global growth in 2023, but 2024 is not certain.
Solomon said he feels there is a 35% chance that the economy will remain in positive growth mode of about 1%, with inflation at roughly 4%.
Solomon said there was a reasonable possibility that we could navigate a scenario like that. I think there is a very, very reasonable possibility that we could have a recession. It is uncertain and anyone who tells you they know, they don't know, Solomon said. One thing I have learned over the last 40 years of doing this is that markets are pretty smart. That doesn't mean that there are 100% right at any moment in time. Solomon said he doesn't know if bitcoin will have any value in 10 years and he focuses on other aspects of digital currencies, such as speeding up institutional transactions.
He said that companies specializing in innovation in institutional transactions will be super successful, and he believes that there are opportunities for neo-banks and stable coin.
Solomon said he doesn't have an opinion on Elon Musk's acquisition of Twitter but is interested in seeing what happens and whether the billionaire will make the company a more successful, viable and transparent place for public discourse.
Solomon said that he was watching the movie with all of you. I've got my popcorn and my soda and I'm settling in. It is a super interesting platform. It will be interesting to see if Elon gets it right. These were the latest comments made by Solomon on the economy.
Solomon said on the company's quarterly conference call on October 18 that the global economy continues to face significant headwinds, with high inflation and the most rapid interest-rate hikes in decades.
He said that despite the fact that geopolitical instability is an ongoing concern and GDP-growth expectations are declining as a result of trends that have accelerated toward the end of the quarter on September 30, he said.
Solomon said on Oct. 18. "Macro themes dominate everywhere I go." My conversations with CEOs tell me that they are reconsidering business opportunities and would like to see more certainty before committing to longer-term plans. As we head into the fourth quarter, my sense is that the outlook will remain unaffected, though economic performance will vary by region, and I expect volatility to persist as markets continue to digest these factors.