Goldman CEO expects soft landing for economy, more deals

by Abeer Abu Omar, Joumanna Bercetche and Laura Gardner Cuesta

Goldman Sachs Group Inc.’s chief executive talked up the underlying resilience of the US economy and an improving outlook for dealmaking in a wide-ranging interview, where he also expressed concern about the widening conflict in the Middle East.

“The US economy is doing quite well, it has been very resilient,” CEO David Solomon said in an interview on Bloomberg Television in Riyadh on Tuesday, where he is attending Saudi Arabia’s Future Investment Initiative. “The base case in the US is a soft landing.”

Earlier this month, Goldman reported a 45% rise in third-quarter profit on a surprise rise in equity-trading revenue and a rebounding investment-banking business. While the US election has the potential to bring changes “there is no question that the dealmaking environment is improving,” Solomon said Tuesday. 

At the same time, the Goldman chief highlighted concerns about other parts of the world, including the Middle East where tensions between Israel and Iran are running at the highest level in decades. 

Over the weekend, Israel struck military targets across Iran, delivering on Prime Minister Benjamin Netanyahu’s vow to retaliate for a prior missile barrage by the Islamic Republic.

“I am kind of concerned about the situation,” Solomon said about the Middle East. “It is not good for security, safety and growth.” 

But the war “hasn’t had a significant impact on activity” in the region yet, he said.

Solomon also warned about risks around regulation, with elections coming up in the US on Nov. 5. Polls have shown Vice President Kamala Harris and former President Donald Trump in a dead heat. 

“We do have an election and there will be policy decisions coming out,” said Solomon. “Those will have an impact on the trajectory in 2025 and 2026,” he said, adding that the bank is well-positioned to support either administration and its clients in either outcome. 

“I am a little bit more concerned about European growth and also the economic situation in China, but overall the engine of the US has been quite powerful,” Solomon said. 

Solomon is joined this week by a string of top global financial leaders including Citigroup Inc.’s Jane Fraser and BlackRock Inc.’s Larry Fink, who have become regulars at the Riyadh summit and are set to attend this year.

In his conversation with Bloomberg TV, Solomon touched upon Goldman’s financials: 

• “Our equity franchise is performing very very well. I can’t tell you quarter-to-quarter what the market environment will put up for that franchise, but we are positioned very well to serve our clients and have a leading share position in that business.”
  • Goldman had a more robust September than expected, with the equity franchise performing very well; the fixed-income business has had softer margins year-on-year
  • There has been a narrowing focus on consumer activity, with the bank more focused on the global banking, assets and wealth management businesses

Earlier on Tuesday, Goldman unveiled a new office in the financial district of the Saudi capital, deepening its presence in the largest Middle Eastern economy. Solomon said Goldman isn’t having trouble attracting talent to Saudi Arabia — or the Middle East — as competition between Riyadh and Dubai gets increasingly hotter. 

“I do agree there’s more competition here but that’s a positive actually. The levels of activity are picking up,” he said. Goldman is “well positioned” to act as an investment bank, trader, and asset and wealth manager in Saudi Arabia as client interest expands, Solomon added.

“We’ve been able to attract talent,” he said. “We’re Goldman Sachs.”

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