Goldman CEO David Solomon warns of stubborn US inflation, calms fears of a deep recession, and talks ChatGPT and AI in a new interview. Here are the 9 best quotes.

David Solomon
David Solomon. Reuters

  • David Solomon warned of sticky inflation and suggested the US might escape a deep recession.
  • The Goldman Sachs CEO predicted the Fed will hike interest rates above 5% to curb price growth.
  • Solomon touched on ChatGPT and other AI tools, and flagged fraught US-China relations as a concern.
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David Solomon has sounded the alarm on stubborn US inflation, and suggested the threat of a serious recession has receded.

The Goldman Sachs CEO has reported wide interest in ChatGPT and other artificial-intelligence tools among corporate executives. Moreover, he's underlined his bank's support for both fossil-fuel and clean-energy companies, and expressed concern about the US and China's fraught relationship.

Solomon made the wide-ranging comments during a recent episode of the "Exchanges at Goldman Sachs" podcast.

Here are his 9 best quotes from the conversation:

1. "Inflation is going to be stickier and harder for us to manage. The market thinks a terminal rate is just over 5%. I actually think it's going to be higher than that." (Solomon was discussing how high the Federal Reserve might lift interest rates before cutting them. The US central bank has hiked rates from nearly zero to upwards of 4.5% in the past year, in a bid to curb historic inflation.)

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2. "If you're running unemployment at these low levels, it's very hard to get inflation into check. If you're playing a nine-inning baseball game, we're somewhere in the middle of the game. Not near the end of the game."

3. "Inflation is a big headwind to growth. I think we've got to understand the trajectory of monetary policy and also the impact on unemployment, etcetera, because that will all have an impact on capital spending and investment for growth. We're in a tricky period where there's still a lot of uncertainty. And I worry about that."

4. "The sentiment around the likelihood of a very difficult economic recession has certainly softened. I think the chance that we could muddle through with either a shallow recession or a soft landing certainly feels more likely."

5. "We had a long period of very easy monetary policy. This pandemic was an out-of-the-box experience — the way we closed down economic activity all over the world for an extended period of time, and tried to compensate with massive fiscal support. And now we're rebalancing all that. It's an unusual period of rebalancing that's going to take some time to work through."

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6. "We're off to a very slow start this year, on a relative basis. You'd have to go back 20 years to see announced M&A volumes six weeks into the year as slow as it has been." (Solomon said the amount of mergers and acquisitions was an indicator of CEO confidence.)

7. "There is not a business leader that I'm talking to that's not thinking about the prospect for that as things go forward." (Solomon was discussing the potentially transformational impact of ChatGPT and other forms of artificial intelligence.)

8. "Goldman Sachs is going to be financing fossil fuels for a long time. But Goldman Sachs is also going to be investing capital, and giving advice, and trying to raise capital to support acceleration of technologies that can really accelerate the transition. We need to do both — it's not an 'or,' it's an 'and.'"

9. "There are big-picture risks that I worry about. I obviously am very concerned about the US-China relationship and the complexity of that, which I think is a big headwind to growth over the course of the coming years."

Axel Springer, Business Insider's parent company, has a global deal to allow OpenAI to train its models on its media brands' reporting.

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