Goldman Sachs Group Inc. Chief Executive Officer David Solomon said there’s a “meaningfully higher” chance of a soft landing for the economy now than there was six months ago, echoing the sentiments of his peers that the US could avoid a serious downturn.
(Bloomberg) — Goldman Sachs Group Inc. Chief Executive Officer David Solomon said there’s a “meaningfully higher” chance of a soft landing for the economy now than there was six months ago, echoing the sentiments of his peers that the US could avoid a serious downturn.
“The chance of our having a soft landing here as we go ’23 into ’24 is even higher than I thought it was six months ago,” Solomon said Tuesday at the RBC Capital Markets Global Financial Institutions Conference.
His comments came before the release of prepared testimony from Federal Reserve Chair Jerome Powell that the US central bank is likely to raise interest rates higher than previously thought and is prepared to speed up the pace of hikes if economic data warrants. Fed officials are trying to cool inflation without triggering a recession that drives up unemployment.
On Monday, JPMorgan Chase & Co. CEO Jamie Dimon offered projections for the US economy similar to Solomon’s, saying a deep recession might be escaped and that “we could still have a soft landing.” Dimon pointed to challenges facing the economy including Russia’s war in Ukraine and the West’s relationship with China — headwinds cited by Solomon as well.
“I think you’ve got to be prepared for the fact that it could be more difficult than it is now,” Solomon said. “That doesn’t mean it has to be a train-wreck economic scenario. So far, the Fed seems to be doing a good job, but there’s a lot going on in the world. It’s an uncertain period.”
Brian Moynihan, the CEO of Bank of America Corp., said this week that he expects to “see a slowdown, which frankly, a lot of people are not going to see that much of.” It’s likely to “be more of a technical recession. It won’t be a deep drop in the GDP in the US,” he said.
In a separate appearance at the RBC conference Tuesday, U.S. Bancorp Chief Financial Officer Terrance Dolan said his company’s executives still expect a mild recession, but have pushed out the timeline for when it could occur.
“Soft landing is not a bad way to describe it,” Dolan said.
–With assistance from Sridhar Natarajan and Paige Smith.
(Updates with Powell’s testimony in third paragraph.)
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