“‘Probably a 30% chance of recession as you look forward to the next 12 to 24 months.’”
That was Goldman Sachs Group Inc. GS, -0.08% CEO David Solomon talking about the U.S economy during a couple of recent interviews.
Solomon, who has been the chief executive officer at Goldman Sachs GS since 2018, made the prediction in a telephone interview with Bloomberg on Tuesday. He expanded on it during a CNBC interview on Wednesday.
“You have to think about the fact that there’s a reasonable chance at some point that we have a recession or we have, you know, very, very slow, sluggish growth,” Solomon said.
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But he also cautioned that a recession is far from a sure thing.
“That doesn’t mean that that’s definitely going to happen,” he continued. “But certainly, I think that if you’re running a significant enterprise, you have to be looking through a lens with a little bit more caution right now than you might have been when we were sitting here a year ago.”
Solomon also noted that the recent “tightening” of economic conditions has been predictable based on inflation data and the interest rate hikes by the Federal Reserve.
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This comes after Federal Reserve Chairman Jerome Powell said he is determined to create a “softish landing” for the U.S. economy.
“What we need to see is inflation coming down in a clear and convincing way and we’re going to keep pushing until we see that,” said Powell on Tuesday.
These comments come as the U.S. markets were down on Wednesday after the brief uptick on Tuesday. On Wednesday, the Dow Jones Industrial Average DJIA, -0.68% dropped over 1,100 points, or 3.5%, while the S&P 500 SPX, -0.13% moved 4% lower and the tech-heavy Nasdaq Composite COMP, +0.67% dropped 4.5%.