David Solomon, the CEO of Goldman Sachs, downplayed the chances of a U.S. recession, describing the risk as “very small” despite the ongoing global trade uncertainties. Speaking at the Australian Financial Review Business Summit in Sydney on Tuesday, Solomon acknowledged the concerns surrounding trade imbalances, particularly in relation to President Donald Trump’s aggressive policies.
Solomon explained that while Trump’s actions are rooted in addressing perceived trade imbalances, the execution of these policies remains a key uncertainty. Trump’s recent decision to impose new tariffs on Canada and Mexico, announced Monday, has added to the volatility in both equity and bond markets as investors consider the potential consequences for global growth.
Additionally, the White House confirmed Trump’s decision to double tariffs on China to 20%, a move that is set to take effect shortly after midnight in Washington.
Solomon emphasized the economic challenges facing China, noting that the country is grappling with significant obstacles. He also referred to Blackstone Inc. CEO Steve Schwarzman’s earlier comments at the same conference, where Schwarzman shared insights from his firm’s quarterly survey of 250 companies. The survey indicated that U.S. executives are not anticipating a recession in the near term.
Despite the uncertainties in trade policy, Solomon highlighted the importance of closely monitoring the credit cycle. He pointed out that the U.S. economy has now gone more than a decade without experiencing a normalized credit cycle, warning that the accumulation of excess in the financial system could have future implications. However, he reassured that these developments may not necessarily lead to a crisis, but investors should stay vigilant about potential risks stemming from interconnected financial dynamics.
Related topics:
What Are the 10 Best Ways to Learn Stock Trading?
How Much Can a Person Earn from the Stock Market?
Stock Market Recap, Feb. 20, 2025: Dow and S&P 500 Close Lower; Walmart Slips on Weak Guidance
