Tariff Chaos Is Softening the U.S. Economy: Goldman Sachs CEO David Solomon

David Solomon, chief executive officer of Goldman Sachs Group Inc., said signs of strain are becoming more visible across the U.S. economy.

Speaking to CNBC on Wednesday, Solomon highlighted troubling labor-market signals, pointing out that “there’s no question we’ve seen some job data that indicates that there has been some softening.”

He added, “I think you have to watch that very, very closely,” noting that the economic outlook remains clouded by ongoing trade negotiations and policy uncertainty.
Tariff Turmoil Clouds Growth Prospects

Solomon directly linked much of the slowdown to President Donald Trump’s escalating trade war, which has unsettled markets and weakened growth momentum.

“Trade policy is still getting negotiated and still getting implemented,” he said. “There’s uncertainty where this all lands and no question in my mind that it’s having an impact on growth.”

Even as wholesale inflation unexpectedly cooled in August, Solomon stressed that “signs of persistently high prices” remain concerning.
 

Wall Street Echoes Concerns
Goldman Sachs is not alone in raising the alarm. JPMorgan Chase & Co. CEO Jamie Dimon warned Tuesday that “the economy is weakening,” citing government revisions that showed U.S. payrolls may have been overstated by 911,000 jobs, or about 0.6%. That revision revealed average monthly job growth was roughly half of what earlier data suggested.

Trump Renews Fed Pressure
The revised labor data prompted Trump to intensify his attacks on the Federal Reserve, calling its leadership “incompetent” in a social media post and urging rapid rate cuts.

But Solomon diverged sharply from the administration, saying there is “no need for the Fed to rapidly cut interest rates.”
“It just doesn’t feel to me like the policy rate is extraordinarily restrictive when you look at risk appetite,” Solomon said earlier this week at a Barclays Plc financial-services conference.

He also defended the importance of central-bank independence, arguing, it’s important to appreciate how well central-bank independence has served all of us.

(With Inputs From Bloomberg)

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