Goldman Sachs Chief Executive David Solomon said Wednesday that the chances of the U.S. economy soon entering a recession are lower now than they were earlier this year.
“I don’t see any data in any way, shape or form that leads me to believe that that chance is accelerating at the moment,” Solomon told CNBC’s Tanvir Gill in Ningbo, China.
The Goldman chief had told CNBC in January that he saw a 50 percent chance of a U.S. recession by the end of 2020. Now, however, he said he thinks the risk “feels less than that today.”
That will come as a welcome assessment for investors concerned by the inversion of the U.S. bond yield curve last month. That event — when long-term debt yields moved lower than short-term debt yields— is seen by many to be a reliable recession indicator, so many in the market found the development worrisome.
Solomon, for his part, expressed little concern.
“I think the U.S. economy is chugging along pretty well. I think the U.S. economy is growing at trend at the moment,” he said.
“I do think, as we came into the end of the year, there was some fear that we really were in a place where economic growth was really pivoting into very, very significant slowdown,” Solomon added. “I do think growth slowed around the world and I do think the growth trajectory slowed in the United States as we finished 2018 and it’s pretty clear to me that while the first quarter was sluggish, the second quarter was chugging along pretty well and certainly we’re at trend.”
Central banks around the world have also become “much more accommodative,” the Goldman Sachs exec said, adding that such a development “bodes well for continuing the expansion.”