Goldman Sachs CEO David Solomon made a bold prediction about the future of the Fed's interest rates. Speaking at an event held at Boston College, Solomon stated that he does not currently expect the FED to make any reductions in interest rates this year.
The CEO's prediction comes amid an economy that has shown remarkable resilience, thanks largely to government spending. “I still don't see compelling data to say we will lower interest rates here,” Solomon said, adding that he currently foresees “zero” reductions.
Solomon also emphasized the role of investments in artificial intelligence infrastructure in increasing the economy's resilience to the FED's monetary tightening. That resilience could be a key factor in the decision not to cut rates, according to Solomon.
However, Solomon also warned of the risk of a significant economic slowdown, which he described as “real and palpable”. Noting that this risk is greater now than six months ago, Solomon also cited geopolitical fragility as an important factor contributing to this. “This is something people will have to live with for a long time,” he warned.
*This is not investment advice.
