Goldman Sachs CEO David Solomon expressed his expectation that the Federal Reserve will not lower interest rates this year, emphasizing his view at a Boston College event where he mentioned his anticipation of “zero cuts” and a belief in the persistence of inflation.
This stance contrasts with market projections of a potential rate cut by the Fed, which was further fueled by the recent release of minutes from the April 30-May 1 policy meeting revealing concerns that inflation may not ease as quickly as previously assumed.
Solomon, addressing corporate executives and students, highlighted the varied experiences of Americans amid inflation, noting changes in consumer behavior due to rising prices. He also anticipated interest rate reductions in Europe, attributing this to economic challenges within the region.
Solomon raised concerns about global growth obstacles, including inflationary pressures and geopolitical uncertainties, while advocating for a comprehensive approach to industrial policy in the U.S., stressing the necessity of infrastructure development to support electric vehicle re-charging and the increased demands of AI technologies on the current power grid.
Although the comment from Goldman’s CEO is in contrast to the market expectations, he is not the only one anticipating the Fed to hold rates for longer. Bank of America warned investors earlier this week that the probability for Federal Reserve rate hikes is high, but rate cuts are still far off.
Meanwhile, BlackRock‘s Head of Asia-Pacific Susan Chan expressed her view on Bloomberg’s Tiger Money program, suggesting that she does not foresee the Fed implementing interest rate cuts this year.
