2023-06-13 11:58:29
Goldman Sachs CEO David Solomon indicated that the US economy showed surprising resilience this year, but warned of the difficult challenges it might face in the future.
“We’re in a moment of uncertainty,” Solomon said in an interview with CNBC. “It’s a period that requires a little bit of caution.”
Solomon predicted that the US economy would enter a recession-like state, albeit not a real recession, as it would succeed in avoiding a hard landing, but there would still be strong concerns regarding slowing growth and controlling inflation.
While Solomon does not expect Fed policymakers to raise interest rates to fight inflation at their upcoming meeting this week, he believes that strong economic indicators and stubborn inflation might push them higher in the future.
He believed that these increases would make the economic environment somewhat more challenging, ruling out that the United States would fall into recession before the end of this year or the beginning of 2024.
Banking crisis threatens the real estate market
The collapse of Silicon Valley and Signature banks in March, and the sale of the troubled First Republic bank to JPMorgan Chase, radically changed expectations for the performance of regional banks, and Solomon sees the need for more mergers between Banks to keep the sector safe.
The real estate market is the largest single asset class in the world and there is no doubt that the 14-month interest rate hikes by the Federal Reserve and the recent banking crisis have put enormous pressure on this huge market.
According to Solomon, regarding 65 percent of real estate loans are linked to medium-sized banks, and they are the same banks that are under the greatest pressure as a result of the banking crisis. faced by players in the real estate market.
Are we seeing more layoffs?
Like the rest of the financial institutions on Wall Street, Goldman Sachs has been affected by weak activity recently, which may push it to shed more employees, and according to Solomon’s statements on Monday, the bank is now preparing for its third round of job cuts in light of the fight once morest… Investment banks to cope with the economic slowdown.
The bank is expected to lay off regarding 250 people in the next round of layoffs, which will extend to all management levels, including department directors and senior executives, a source familiar with the matter told CNN.
This comes at a time when technology companies and investment banks in the United States are continuing layoff plans, including Spotify, JPMorgan and Meta, the parent company of Facebook.
(Nicole Goodkind-CNN).
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