Goldman Sachs CEO David Solomon stated on Monday that the likelihood of a recession in the United States is rising amid increasing uncertainty in trade policies and many CEOs feeling confused about how to plan for the future.
He pointed out during Goldman Sachs' first-quarter earnings call that the operating environment we face as we enter the second quarter is significantly different from the beginning of the year, with many unknown factors brought about by the new round of tariff policies:
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“The operating environment we face as we enter the second quarter is markedly different from what it was at the beginning of the year.”
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Solomon noted that the uncertainty of the future poses significant risks to both the U.S. and global economies. Even before the escalation of tariffs, global economic growth had already slowed, and the new policies have almost “reset” global expectations for future growth. He pointed out that Goldman Sachs' corporate and investment clients are generally concerned that short-term and long-term uncertainties are limiting their ability to make key decisions.
Solomon believes that the government's recent demonstration of a more gradual negotiation stance is commendable, as it provides room for negotiations with multiple countries, but market volatility will continue until specific policies are implemented.
<h2>Mixed Results for Goldman Sachs' Earnings Report</h2>
Solomon made these remarks during the earnings call following Goldman Sachs' release of its first-quarter earnings report.
The performance showed that market trading volatility helped boost overall revenue and profits, while investment banking fees declined.
Goldman Sachs' net profit for the first quarter increased by 15% year-on-year to $4.74 billion. Revenue grew by 6% to $15 billion. The trading division performed strongly, benefiting from market volatility caused by tariffs, with equity trading revenue increasing by 27%, and overall trading revenue reaching $8.59 billion, marking the best quarterly performance since 2009.
However, investment banking faced pressure, with bank fee income declining by 8% year-on-year, and merger advisory revenue plummeting by 22%, falling short of analysts' expectations.
<h2>Wall Street CEOs Sound Alarm</h2>
Solomon is not the only executive to voice concerns. Last week, CEOs from Wall Street giants such as JPMorgan Chase, BlackRock, and Morgan Stanley expressed their worries about the economic outlook.
JPMorgan Chase CEO Jamie Dimon stated that the current economy is facing considerable turbulence, with geopolitical and trade tensions leading to increased market volatility, causing clients in investment banking to become more cautious.
BlackRock CEO Larry Fink remarked that the extent of the new round of tariff measures “far exceeds anything I have seen in my 49-year financial career,” and the uncertainty and anxiety about the future of the market and economy have dominated almost all of our conversations with clients.
Morgan Stanley CEO Ted Pick believes that we are still in a pause, the trading cycle is lengthening, and we do not know how inflation will evolve, nor can we determine whether the economy will contract.
In the past week, pressure on Wall Street has intensified, with IPOs and merger deals being shelved, and leveraged loans and bond issuances being suspended. Furthermore, according to the Financial Times, hedge funds are facing the largest margin calls since the pandemic began in 2020, which could trigger more stop-loss selling and exacerbate market turmoil

Goldman Sachs CEO David Solomon warned that the likelihood of a U.S. economic recession is rising amid increasing uncertainty in trade policies and many CEOs feeling confused about how to plan for the future. He noted that the government's recent display of a more gradual negotiation stance is commendable, but market volatility will continue until specific policies are implemented. Previously, several Wall Street CEOs, including those from JPMorgan Chase, BlackRock, and Morgan Stanley, also issued similar warnings, pointing out the high uncertainty facing the future economic outlook in the United States

- Goldman Sachs CEO David Solomon indicated that the likelihood of a U.S. recession is rising amid increasing trade policy uncertainty and CEO confusion about future planning.  
- He noted that the operating environment has significantly changed since the beginning of the year, with new tariffs creating unknowns that pose major risks to both the U.S. and global economies.  
- Despite a 15% increase in net profit to $4.74 billion in Q1, concerns about economic prospects were echoed by other Wall Street CEOs, leading to a slowdown in IPOs and M&A activity.

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Goldman Sachs CEO Solomon: The likelihood of a U.S. economic recession has increased