Interview, Fireside Chat
How Goldman Sachs’ John Waldron is navigating “a more uncertain time”
- The U.S. economy is projected to avoid recession through resilient consumer spending, strong employment, and fiscal impulses, though high long-term interest rates in the U.S., Japan, and elsewhere may dampen growth.
- Tariff rates are expected to stabilize at an effective 13–15 percent, creating a new normal that will likely end the current pause in corporate strategic investments, capital expenditures, and M&A by the coming months.
- Corporate decision-making is currently on hold until trade policy clarity emerges, with U.S.-dependent firms and those sourcing heavily from China facing more pronounced impacts; business plans are being re-underwritten for 2025 and beyond.
- U.S. government deficits exceeding six percent are deemed unsustainable, prompting bond market concerns and a likely marginal reduction by global allocators in U.S. dollar assets, with a larger shift occurring only if policies remain disruptive.
- Capital market activity is anticipated to recover over the next seven weeks following a six-to-ten-week lull, with a busier summer expected, provided no further exogenous shocks occur, though IPO pipelines may not fully materialize in uncertain conditions.
- Europe is not expected to outperform the U.S. in growth based on current data, though potential increased fiscal spending in Germany could positively impact the region pending further hard data.
- Risk management involves a "two-footed" posture with increased liquidity and domestic hedging, following a moderation of risk positioning since April 2nd, while interest rate uncertainty continues to be monitored.
- Long-term success relies on sustaining culture, technology investment, and operational focus, with leadership communication expanded across physical, digital, and podcast channels to engage clients and staff globally.
- Risk intermediation revenues are expected to remain durable with a standard deviation of 6% over the last five years, compared to 24% in the prior decade, supporting long-term value and share of wallet growth.