Goldman Sachs CEO David Solomon said on Tuesday that he sees a greater chance of a “softer landing” for the U.S. economy despite ongoing fears about a potential recession spurred by federal efforts to combat inflation.
Speaking at a Credit Suisse conference in Miami, Fla., Solomon said business leaders are optimistic about the economic climate the U.S. compared to 2022, while noting continued concerns around inflation and the rising tensions between the U.S. and China.
“I think it’s going to be, you know, a twisty, turn-y kind of road to navigate through this and get to the other side, but I think the chance of a softer landing feels better now than it felt six to nine months ago,” Solomon said at the news conference, according to CNBC.
Solomon also said while inflation continues to be an ongoing issue, business leaders were optimistic that they could navigate through this period.
“Consensus has shifted to be a little bit more dovish in the CEO community, that we can navigate through this in the United States with a softer economic landing,” Solomon said, adding that the American consumer has been “much more resilient than people expected.”
Solomon’s remarks follow the similarly optimistic sentiment from Treasury Secretary Janet Yellen during an interview with ABC’s Good Morning America earlier this month, which came on the heels of a surprisingly strong jobs report.
“You don’t have a recession when you have 500,000 jobs and the lowest unemployment rate in more than 50 years. What I see is a path in which inflation is declining significantly, and the economy is remaining strong,” Yellen said during the interview.
“And really, that path, I believe, is possible. And it’s what I’m hoping we will be able to achieve,” she added.
However, Federal Reserve Chairman Jerome Powell has struck a more cautious note, warning that interest rates are likely to continue increasing in the ongoing battle against inflation.
“There’s been an expectation that it’ll go away quickly and painlessly,” Powell said in remarks to the Economic Club of Washington last week. “I don’t think that’s at all guaranteed.”
He added, “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.”
The Labor Department released data on Tuesday showing that the consumer price index rose to 0.5 percent in January for an annual gain of 6.4 percent, a higher-than-expected jump that could encourage the Fed to hike up interest rates further.
Solomon also said at the conference that his company will follow a “much tighter hiring plan” this year after laying off about 3,200 employees last month due to slow economic conditions, CNBC reported.