Goldman CEO Says Recession Less Likely In US
Goldman Sachs Chief Executive David Solomon assuaged earlier fears about the U.S. likely to face a recession in 2020. The dread of an impending recession felt in the early period of 2019 had reduced to a large measure according to him.
Solomon revealed that he saw no indication which led him to believe otherwise. His statements will be welcomed in huge measures by investors who had been worried in view of the U.S. bond yield curve inversion in the previous month. However, according to Solomon the event was not a cause for any worry and he felt that the U.S. economy was on the right path and moving well ahead.
He stated that though fears about a slowing economic growth were felt deeply around the end of the previous year with the first quarter showing no sign of recovery; the story in the second quarter was quite different. The second quarter showed positive indications within the economy implying that they were at trend. The increased accommodativeness of Central banks around the globe went to prove his point.
The first quarter was tough for Goldman Sachs as its $8.81 billion revenue dipped below analysts’ expectations. FICC, or the fixed income, currency and commodities segment of the investment banking company rode rough seas as it showed bad results as compared to those of other banks.
Solomon attributed the reason to the reduced wallets of the business participants rather than linking it to any cyclical or structural problem. He emphasized the top position held by their company in this business and further talked about their increased market share in this business since the financial crisis which had hit the world about a decade ago.
Plans were discussed by the company executives for improving the earnings from this segment. Increased investment in promising segments, reducing resources in under-performing ones and better application of technology were some of them as reported by FT.