The chances that the US economy skids into a recession are “not significant” near term as American households extend the expansion and trade tensions appear to be easing, the CEO of Goldman Sachs Group Inc (NYSE:GS) said in an interview.
“I’ve said that I still think the chance of a U.S. recession between now and the election is small — in the distributions of outcomes, it’s a smaller outcome — I said roughly 25%,” CEO David Solomon said on TV Tuesday.
“Nine months ago I probably would have told you it was very small, kind of 15%,” he said. “So I do think the uncertainty has increased a little bit some of the risk,” but economic data and earnings momentum have held up well and American consumers are “still very healthy,” he said.
The nation’s factory sector is not faring as well, Mr. Solomon said. “There’s no question, the industrial, the manufacturing part of the economy is slower, but when you look at the whole package, I think the chance of a recession in the near term is not significant.”
Given the overall strength, the economy may not warrant more interest-rate cuts by the Fed, Mr. Solomon said. “When you look at the economic data, I’d be surprised if rates push lower from here based on the current set of economic data we have.’
One source of uncertainty; the US trade dispute with China is showing signs of easing.
“If you are watching what’s coming out of the administration in Washington, if you are listening what’s coming out of China, I think it feels like both are incentivized to have some sort of a phase one deal, so there looks like some progress, some movement forward.
It fells like we’re going to have something constructive happen.”
The Trump Policies are working.
Making and Keeping America Great!
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