David Solomon, the CEO of Goldman Sachs, has stated that he does not anticipate an interest rate reduction from the United States Federal Reserve in 2024.
At a Boston College function, David Solomon declared, “I’m still at zero cuts. I believe that stickier inflation is ahead of us.”
His remarks followed Federal Reserve members’ recent declaration that before lowering interest rates, the country’s central bank should wait a few more months to make sure inflation is returning to its target of 2%.
David Solomon’s remarks contradict market predictions that the Fed will lower interest rates at least once in 2024. The release of the Federal Reserve’s April 30-May 1 policy meeting minutes revealed that rate-setters believed inflation could take longer to lessen than previously believed, which caused traders to decrease their bets on more rate cuts this year on Wednesday.
Speaking to a group of roughly 150 senior business leaders and Boston College students, David Solomon expressed his belief that the US economy is fundamentally sound, but he also pointed out that different Americans are not feeling the effects of inflation or growth equally.
David Solomon asserted, quoting a recent discussion he had with the CEO of a grocery chain who had observed consumers reducing the size of purchases in reaction to growing costs, that “inflation is not only nominal, it’s cumulative.”
David Solomon continued, “We’re beginning to see the average American slowing down and modifying his habits.”
The CEO of Goldman Sachs added that given the region’s “more sluggish economy,” he does anticipate interest rate reductions in Europe in 2024.
He expressed concern about several factors impeding the global economy, including inflationary pressures and geopolitical issues.
“We will have to put up with the geopolitical fragility for a while,” David Solomon said.
Additionally, David Solomon advocated for a more comprehensive industrial policy framework inside the United States.
He referred to the necessity of developing a network of charging stations for electric vehicles and the additional strain that implementin