Goldman Sachs CEO Expects ‘Softer Landing’ for US Economy

There’s a growing consensus among CEOs that the economy will see a softer-than-expected landing.

So said Goldman Sachs Chairman and CEO David Solomon while speaking Tuesday (Feb. 14) at the 24th annual Credit Suisse Financial Services Forum.

“If you have looked at that back last June, you would have had a much greater percentage of the population of CEOs saying there was no chance we can navigate through this without a very meaningful recession,” Solomon said.

Solomon attributed CEOs’ more optimistic outlook to consumers being much more resilient than had been expected.

At the same time, though, inflation remains “sticky,” it is still a big headwind for growth and corporate investment, and it’s going to keep investment conservative until there is more certainty, Solomon said.

Geopolitical tension, such as that between the United States and China, is another headwind to growth, Solomon added.

Solomon said that while he agrees with the consensus among CEOs that there will be a softer-than-expected landing, there are still challenges, and the economy is probably going to grapple with slower growth for some time.

“I think it’s going to be a twisty-turny 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.

When it comes to market sentiment and strategic activity, Solomon said that while activity has been slower over the last three to four months, it hasn’t been non-existent.

Market confidence and strategic activity is certainly down from the robust level seen over the last couple of years, but people still have strategic plans for their businesses that require capital allocation, Solomon said.

“One of the things that for most companies is important in capital allocation is the possibility of inorganic growth, and so it continues as part of our ecosystem — just not at the same pace that we’ve seen when confidence is higher,” Solomon said.

PYMNTS’ latest CE 100 Index shows that stocks in the category have made a strong showing thus far in 2023. Year to date through Feb. 10, they are up 15.6%.