Despite apprehensions about a possible recession generated by government steps to address inflationary pressures, Goldman Sachs CEO David Solomon asserted on Tuesday that he identifies an improved potential for a “soft landing” of the U.S. economy.
“‘The Chance of ‘Soft Landing’ Is Higher Compared to 6 Months Ago”
Delivering a keynote address at the Credit Suisse conference in Miami, Fla., David Solomon expressed his belief that business owners are feeling confident about the state of the American economy compared to 2022; however, he added that worries around inflation and America-China tensions remain. “Though it will be difficult to make our way through this turbulence and get back on track,” said Solomon during his press appearance as reported by CNBC, “I feel hopeful for a soft landing now more than I did 6-9 months ago.”
David Solomon mentioned that although inflation has been a lingering issue, executives remain hopeful that they can easily maneuver through the current business climate. “The view of CEOs has become slightly more bearish in thinking we can make it through this with minimal impact from the U.S.,” said Solomon, adding that American customers have shown surprising resilience based on expectations.
Treasury Secretary Janet Yellen Had the Same Opinion as David Solomon
Treasury Secretary Janet Yellen expressed her optimistic view of the economy in an interview with ABC’s Good Morning America earlier this month following a strong jobs report. “It is highly unlikely to have a recession when the unemployment rate is at its lowest level in more than 50 years, and 500,000 jobs were created,” she said confidently. She further added that it was possible to achieve lower inflation rates while still having a flourishing economy — something which Solomon also alluded to– and that was what she hoped would come true soon.
On the other hand, Fed Emphasizes that Interest Rates Will Increase
Federal Reserve Chairman Jerome Powell has taken a more cautious approach to the increasing inflation rate, cautioning that further measures may need to be implemented. At last week’s Economic Club of Washington event, he noted, “There’s been an expectation that it’ll go away quickly and painlessly…I don’t think that’s at all guaranteed,” explaining “it will take some time, and we’ll have to do more rate increases, and then we’ll have to look around and see if we’ve done enough.”
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