- Goldman Sachs CEO David Solomon said recession risks are rising as global economic uncertainty worsens.
- Despite strong trading profits, Goldman saw a drop in investment banking revenue due to stalled deals.
- Solomon warned that Trump’s tariffs have “reset” growth expectations and will keep markets volatile.
Goldman Sachs boss David Solomon says the chances of a U.S. recession are climbing, pointing fingers at global trade tensions and a hazy business outlook that’s got CEOs second-guessing their next moves.
Speaking Monday after the bank’s Q1 earnings drop, Solomon told analysts that economic growth was already cooling before President Trump’s latest wave of tariffs hit. But now? It’s a different ballgame entirely.
“We’re looking at a very different environment heading into Q2 than what we had earlier this year,” Solomon said, noting the impact of Trump’s sudden tariff hikes. “It’s reset expectations everywhere.”
Even with Goldman’s profits up 15% to $4.74 billion and revenues climbing to $15B, the underlying tone from the firm was one of caution. Investment banking fees dipped 8%, and M&A advisory work was down a sharp 22%—not quite what Wall Street was hoping for.
Solomon said many of the bank’s clients were holding off on big decisions, stuck in limbo because of all the uncertainty. “There’s just too much fog on the path ahead,” he warned.
Tariffs Shake Things Up… Again
Solomon didn’t sugarcoat it. He sees the trade war as a growing threat, not just to Wall Street but to global economic stability.
“The risk of a recession is clearly rising,” he added. “And the longer this uncertainty drags on, the more damage it could do.”
Markets have been yo-yoing since Trump rolled out the first wave of tariffs earlier this year. While Goldman saw a bump in trading revenues—up 27% on the quarter, thanks to all the volatility—it’s not exactly the kind of boost that inspires confidence.
Even other major players echoed the concerns.
JPMorgan CEO Jamie Dimon talked about “considerable turbulence,” while BlackRock’s Larry Fink said the tariffs went “further than I could have imagined in my 49 years in finance.”
Wall Street’s Still Waiting
The mood across the financial sector is tense. IPOs are being shelved, mergers are stalled, and big loan deals are just sitting there, waiting. Some hedge funds are even facing margin calls not seen since the early COVID days in 2020.
Morgan Stanley CEO Ted Pick captured the mood: “We’re still in a holding pattern. It’s hard to tell how all this plays out.”
Solomon, for his part, did express some hope that the administration’s tone is softening a bit—offering space for actual negotiations. But even then, he wasn’t overly optimistic.
“Until things settle down,” he said, “markets are gonna keep swinging all over the place.”
