Solomon said Tuesday that the U.S. economy might be headed for a downturn that could make investing more difficult.
Solomon said during a live interview on CNBC that it is a good time to think more cautiously about your risk appetite.
You have to expect that there will be more turbulence in the future. It doesn't mean that we have a difficult economic situation. There is a chance that the United States will have a recession.
Solomon spoke after Goldman released its third-quarter earnings results. This is an important time for the company as it prepares to combine its four main businesses into three.
He said reorganizing the company will help the bank serve clients better.
Solomon said the basics don't change. It is the same leadership that moves to different places.
Solomon spoke about the importance of caution in regards to the tightening of financial conditions and the rise of inflation.
Since March, the Federal Reserve has been raising interest rates in order to keep inflation in check. The markets have reacted very strongly.
Solomon said that the environment will be cautious and prepared for.
His remarks came just a few days after his counterpart at JP Morgan, Jamie Dimon, also warned of looming trouble for the U.S. economy, saying higher inflation and interest rates and the war inUkraine threaten an economy that otherwise is doing well now.
Solomon said investors needed to be aware of the challenges ahead.
He said that asset appreciation will be harder in an environment where inflation is embedded. Are we going to get stuck in that situation for a long time? I'm not sure.
In determining how well the U.S. is able to navigate through its challenges, public policy will be important.
Is it possible to invest in our society in a way that makes it easier to shift this? He said that he was going to focus on it even though he didn't have the answers to that. I think risk managers need to be prepared for a more difficult environment in the future.
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