Goldman Sachs CEO David Solomon Dismisses Fears of Economic Recession

Goldman Sachs CEO David Solomon stated that he does not see a looming economic crisis but things could change easily.

Solomon stated that the current economic environment is not alike the pre-crisis days of August 2007 however things could change because of the trade war.

“The underlying economy is still doing okay. The chance of a recession in the near term is still relatively low,” Solomon stated. “But we have to watch what’s going on with tariffs.”

However, others have expressed concern about the Unite States economy. JPMorgan Chase economist Joseph Lupton stated that the probability of a US recession has climbed to 40%.

Goldman Sachs CEO does not see that, and stated that “There is a tendency to look at things through the rearview mirror.”

The trade wars have made investors around the world very nervous and The Trump administration has pledged a 10% tariff on $300 billion of Chinese goods by September 1^st. These tensions might hurt the economy as it will make households and businesses nervous to spend money on the economy.

Solomon believes the tariffs have not affected the US economy as much but it has to be watched as it can drastically slow down the economy of America.

Solomon also supports the Trump administration to rebalance the trade relationship with China. Solomon stated that “I’m not a fan of tariffs, but we need to find a way to push.”

Solomon touched on the controversy surrounding the Federal Reserve. He stated that it is important to have an independent Fed, even though Trump wants the Fed to slash interest rates by a full percentage point, which is typically done during emergencies.

Solomon stated that cutting of interest rates should not have anything to do with politics as it is unhealthy.