Goldman Sachs President Waldron issued a gloomy forecast at an investor conference, warning of tough times ahead due to a series of shocks to the global economy. Concerns stem from inflation levels, changes in the Federal Reserve’s monetary policy and risks from the Russian-Ukrainian conflict, which could put the global economy in a bind.
Looking down on the U.S. economy seems to have become the “new consensus” of more and more Wall Street bigwigs. First, the CEO of Wells Fargo said that the U.S. economy is unavoidable to a certain degree of recession; yesterday, JPMorgan Chase CEO Dimon also warned that to do a good job Prepare for a “hurricane” as the economy faces a series of unprecedented challenges; another Goldman Sachs president issued a warning today.
Goldman Sachs No. 2 John Waldron issued a gloomy forecast at an investor conference on Thursday, June 2, eastern time, warning of a tough time ahead due to a series of shocks to the global economy.
The current environment is quite tricky, if not the most complex and uncertain in my career. The various shocks to the entire system are unprecedented for me.
The remarks by Goldman Sachs Group Inc President and COO Waldron echoed Dimon’s stark warning on Wednesday, which warned investors to prepare for an economic “hurricane,” even though Dimon believes U.S. consumers still have six to nine months to go The “big water release” during the epidemic is still providing funds for American households, but the quantitative tightening of monetary policy (QT) and the conflict between Russia and Ukraine will still bring many challenges to the US economy.
Waldron said he wouldn’t “use any weather analogies,” but his concerns stemmed from inflation levels, changes in the Federal Reserve’s monetary policy and risks from the Russia-Ukraine conflict that could put the global economy in a bind:
We expect tougher economic times ahead, and we’re undoubtedly seeing a tougher capital market environment.
In fact, this is not the first time Goldman Sachs executives have warned of a recession in the U.S. Last month, Goldman Sachs CEO Solomon predicted a 30% probability of a recession in the U.S. economy within 1-2 years, and advised clients to be more cautious about their financial situation , which also warned of the negative impact of the Fed’s measures to fight inflation.
Waldron became one of the banking industry’s harshest critics of the Fed earlier this year, when he slammed the central bank for its lack of autonomy and determination to withstand pressure to tame the hottest currency in 40 years Measures required for expansion.
However, the lifelong investment banker noted that he was surprised by the “resilience” of the M&A market:
(M&A market) It’s not consistent with everything I’ve been talking about.
One possible outcome is that this will start to flip because you’re seeing demand destruction, which is a reasonable expectation (the level of “resilience” in the M&A market has slowed), but we’re watching this signal carefully.
At the same time, he is confident in Goldman’s ability to maintain high profits despite the prospect of an economic downturn.
We will do well regardless of the economic environment.
Goldman Sachs’ first-quarter earnings report released in April showed that overall revenue was $12.93 billion, compared with expectations of $11.73 billion; earnings per share were $10.76, much higher than the expected $8.90. Although the stock underwriting activity was very bleak, making the investment banking business sluggish, the transaction boom brought about by the geopolitical crisis drove Goldman Sachs’ FICC revenue to show explosive growth in the first quarter.
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