Goldman CEO David Solomon says inflation is ‘deeply entrenched’ in the global economy

Finance

Goldman Sachs CEO David Michael Solomon attends a discussion on “Women Entrepreneurs Through Finance and Markets” at the World Bank on October 18, 2019 in Washington, DC.
Olivier Douliery | AFP | Getty Images

Goldman Sachs CEO David Solomon said Monday that inflation is deeply entrenched in the economy and it’s unclear whether the situation will improve later this year.

“We see inflation deeply entrenched in the economy, and what’s unusual about this particular period is that both demand and supply are being affected by exogenous events, namely the pandemic and the war on Ukraine,” Solomon told analysts during a call to discuss second-quarter results.

Solomon, who leads one of Wall Street’s top advisors to corporations, then laid out one of the central debates occurring in markets right now: It is known that inflation is at multidecade highs; but how long will it persist?

“My dialogue with CEOs operating big global businesses, they tell me that they continue to see persistent inflation in their supply chains,” Solomon said. “Our economists meanwhile say there are signs that inflation will move lower in the second half of the year. The answer is uncertain and we will all be watching it very closely.”

The uncertainty has Solomon operating cautiously as central banks around the world continue to tighten financial conditions to combat inflation, he said.

“I expect there’s going to be more volatility and there’s going to be more uncertainty and in light of the current environment we will manage all our resources cautiously,” Solomon said.

This story is developing. Please check back for updates.

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