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Goldman Sachs boss David Solomon said economic conditions would
"tighten meaningfully from here" and the U.S. Federal Reserve
could hike rates beyond 4.5-4.75% if it does not see real
changes in behaviour.
"If they don't see real changes – labour is still very, very
tight – they're obviously just playing with the demand side by
tightening. But if they don't see real changes in behaviour, my
guess is they'll go further," he said.
Speaking at Saudi Arabia's flagship investment conference in
Riyadh, he said it was difficult to get out of "embedded
inflation" without an economic slowdown.
The process of unwinding 40 years of "nationalized fixed income
markets" is "disruptive", Solomon added.
JPMorgan Chase & Co's Chief Executive Jamie Dimon, speaking on
the same panel, said the geopolitical situation was more
concerning than a possible recession in the United States.
Dimon said the conflict between Russia and Ukraine, and tensions
between the United States and China were more worrisome than a
potential U.S. recession.
"There's a lot of stuff on the horizon which is bad and could –
not necessarily – but could put the U.S. in recession," he said.
"But that's not the most important thing for what we think
about. We'll manage right through that. I would worry much more
about the geopolitics in the world today."
(Reporting by Hadeel Al Sayegh, Rachna Uppal and Aziz El
Yaakoubi in Riyadh, and Yousef Saba and Lina Najem in Dubai;
Editing by Louise Heavens and Mark Potter)
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