© Bloomberg. David Solomon, chief executive officer of Goldman Sachs Group Inc., during a Bloomberg Television at the Goldman Sachs Financial Services Conference in New York, US, on Tuesday, Dec. 6, 2022. Solomon sees
(Bloomberg) — Goldman Sachs Group Inc (NYSE:). Chief Executive Officer David Solomon said the Federal Reserve could still push interest rates higher as inflation remains stubbornly persistent.
“Inflation is a little bit stickier, and I do think, in the distribution of outcomes, there’s a reasonable chance that rates go higher,” Solomon said in an interview Monday with CNBC. “If they do that, it’s probably going to make the economic environment a little more challenging.”
Solomon said he’s been surprised by how resilient the economy has been even in the face of tightening economic conditions, adding that “we could muddle through here with a much softer landing than we would have expected.”
The Goldman CEO has frequently sounded a more cautious note than the bank’s chief economist Jan Hatzius, whose team lowered the odds of a US recession over the next 12 months to 25% based on waning banking-sector stress and the bipartisan agreement to suspend the nation’s debt limit.
Read more: Goldman Lowers US Recession Probability to 25% After Debt Deal
Solomon said that capital-markets activity, which has been anemic over the past year, could start to recover heading into 2024 as investors and companies have had time to digest the new economic conditions and reset their plans.
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