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Financial Bulletin

Goldman Sachs CEO warns that the market is too optimistic about the

Release Time:2024-02-28

David Solomon, CEO of Goldman Sachs, warned investors not to be too confident that the Fed can achieve a "soft landing" for the US economy in the fight against inflation.

According to media reports, Solomon said at a UBS conference on Tuesday that "the world is moving towards a soft landing", but "the uncertainty is higher" because there are still inflationary pressures and geopolitical risks in the economy.

"The market's expectations for a soft landing are too high. When you look back on the reality of the past three or four years, I find it hard to think that it would be so simple, "Solomon said.

Solomon went on to say, "When I was interviewed on TV in Davos a month ago, the consensus at that time was to cut interest rates seven times. I said,' God, I really don't understand this'."

Since then, the market has lowered its expectations, and it is now expected to cut interest rates four times this year instead of six or seven times.

Solomon said that the United States "has been very strong in the first half of the economy", but consumer spending of low-income groups is slowing down. According to the data released by the World Federation of Large Enterprises on Tuesday, the consumer confidence index dropped to 106.7, which was lower than the downward revision of 110.9 in the previous month and failed to meet the expectation of a slight increase.

"Some business leaders told him that the consumption of' Moonlight Family' has become tight while prices are still high." Solomon said. "I think that in the past few months, you have seen these behavior patterns tighten, which means that the second half of the economy is slightly weaker."

Solomon's comments on the trajectory of economic development are more pessimistic than those he made in September last year, when he said that "the possibility of a soft landing of the economy is greatly increased now".

Risk warning and exemption clause

The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.

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