Goldman Sachs allowed “feeling of a recession” even with slow growth in the US economy

Goldman Sachs CEO David Solomon expects that even if the US GDP rises slightly, it will look like a recession has already begun. About this he told in an interview with CNBC.

“We may still have a situation where economic growth is slow and inflation a little more volatile. So I think we need to be a little more careful. It may not be a recession, but the situation will definitely feel like a recession in terms of economic growth of 0-1% and inflation of 3.5-4%,” he said.

A recession could hit, according to Solomon, later this year or the first half of 2024, but there is a significant chance that it will happen, as consumer demand has been resilient and unemployment remains low.

“We’ll see, but so far things have been going quite well after a very disruptive period…the economy has turned out to be much more resilient than we expected,” he added.

Solomon also allowed the key rate to rise due to unstable inflation, which would “complicate” the economic situation in the country.

A number of leading Wall Street analysts, including billionaire investor Jeremy Grantham and Morgan Stanley’s chief US equities strategist Mike Wilson, had previously warned of an impending recession and a potential fall in the stock market in the coming months, Vedomosti wrote.

On May 3, the US Federal Reserve System (FRS) raised its base interest rate by 25 bp. up to 5-5.25% per annum. The agency noted a moderate increase in economic activity in the first quarter of 2023. The unemployment rate remains low, while inflation is still elevated, the US Federal Reserve said. The last time the US Federal Reserve raised the rate to 4.75-5% per annum at the end of March. According to the agency’s median forecasts, by the end of 2023 the rate will be 5.1%, by the end of 2024 – 4.3%, and by the end of 2025 – 3.1%.