- Goldman Sachs CEO David Solomon told CNN he doesn’t think there is “an impending economic crisis,” as the US economy remains strong despite “slowing a bit.”
- The executive added that the US-China trade war has the potential to end the historic economic expansion, saying “we have to watch what’s going on with tariffs.”
- Solomon also noted that the next recession is unlikely to resemble the 2008 crisis. “There is a tendency to look at things through the rearview mirror,” he told CNN.
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Goldman Sachs CEO David Solomon told CNN he doesn’t see the historic US economic expansion ending soon, and that the current situation doesn’t feel like the days leading into the 2008 financial crisis.
The bank’s boss noted that the economy remains strong, despite central bank rate cuts and some indicators showing an increased risk of the cycle ending. He said he does not “think we’re at a moment where there is an impending economic crisis,” but also expressed concern about the US-China trade war.
“The underlying economy is still doing ok, Solomon said. “The chance of a recession in the near term is still relatively low. But we have to watch what’s going on with tariffs.”
The US Treasury yield curve – one of Wall Street’s most popular recession predictors – looks increasingly similar to its trend before the Great Recession. Though some view the curve’s inversion as a sign of economic woes to come, Solomon said he doesn’t expect the next recession to resemble the 2008 crisis.
“There is a tendency to look at things through the rearview mirror,” Solomon said. He added that the next recession will be “very different.”
When asked about President Donald Trump’s frequent criticism of the Federal Reserve, Solomon said the Fed’s independence was “very, very important.”
He added, “Monetary policy, to me, seems a little bit more attached to markets at the moment. And also politics. And I don’t think that’s healthy.”
Four former Fed chairs recently made similar statements in a joint Wall Street Journal op-ed published on August 5. Paul Volcker, Alan Greenspan, Ben Bernanke and Janet Yellen warned against politicizing central bank policy in an apparent rebuke to Trump’s recent announcements calling for lowered interest rates.
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