Chief Executive Officer of Goldman Sachs, David Solomon, says that there is no impending economic disaster. However, he does feel that the current trade war between the United States and China is an element that could cause the economy to take a dip.
“I don’t think we’re at a moment where there is an impending economic crisis,” says Solomon. Although, the CEO knows that nothing is guaranteed, as he says that “things could change.”
Solomon admitted that the course of the U.S economy is slowing down somewhat, possibly due to the burgeoning U.S-China trade war.
“The underlying economy is still doing okay. The chance of a recession in the near term is still relatively low,” said Solomon. “But we have to watch what’s going on with tariffs.”
How concrete is the economy really?
Not everyone feels so confident though, particularly as global markets endured some instability last week over concerns regarding the trade war.
“We may well be at the most dangerous financial moment since the 2009 Financial Crisis,” tweeted former U.S Treasury Secretary, Larry Summers.
Billionaire Jeffrey Gundlach suggests that there is a 75 percent likelihood of a recession before the upcoming 2020 elections. He says that the U.S Treasury yield curve is looking very much like it did back in 2007. Despite this, Solomon dismissed such possible similarities.
“I don’t see that,” said the Goldman Sachs CEO. “There is a tendency to look at things through the rearview mirror.”
Trump’s administration plans to establish a 10 percent tariff on $300 billion of Chinese products by the 1st of September. Several economists have advised that intensifying trade friction might harm the economy by rendering homes and businesses too anxious to spend their cash.
“At the moment, I think the real impact of tariffs has been small, but you’ll have to watch that carefully,” Solomon commented. “Those are the kind of things that can change confidence. And confidence can slow down economic activity.”