Goldman Sachs CEO David Solomon warned on Tuesday that the U.S. economy may be headed for a downturn which could make investment and business decisions more difficult.
In an interview with CNBC, he stated, "I think this is a time to be careful, and I think if you're running a risk-based business, it's time to think more carefully about your risk box, your risk appetite," Solomon said. .
He added, “I think you have to expect that there will be more volatility than there is now. However, it does not mean that we will have a very difficult economic scenario. But in terms of income distribution, there is a probability that we will experience a recession in the United States,”.
Solomon spoke just minutes after the company released a third-quarter earnings report that beat analysts' expectations for both profit and revenue. The decision comes at an important time for the economy as it prepares for yet another reorganization, this time combining the Wall Street giant's four main businesses into three.
The company's reorganization and streamlining of the business reflect an "evolution of the one-Goldman Sachs ethos" that it says will better serve the bank's clients.
Regarding that, Solomon stated that the fundamentals have not changed. "Leadership does move to different places, but it is the same leadership."
Speaking on macro issues, Solomon repeatedly stressed the importance of caution, referring to the tightening of monetary policy and rising inflation in recent months.
The Federal Reserve has aggressively raised interest rates in an effort to ease inflation, which is running at its highest level in more than 40 years. The market has reacted strongly, with stocks falling and bond yields soaring.
Finally, Solomon warns that the economic nuances heading into 2023 are something you need to be careful and prepared for.
