Goldman Sachs CEO, David Solomon, asserts that while the probability of a global recession in 2024 is lower compared to the previous year, inflationary risks persist due to an unpredictable political landscape. In a recent podcast, Solomon expressed optimism, stating they are entering 2024 in a more constructive environment. However, he emphasized that this doesn’t guarantee immunity from a recession, citing potential headwinds in geopolitical dynamics affecting energy. Solomon believes inflation, though abated, could remain stickier than the market anticipates, cautioning that uncertainties might impact the global economic landscape.
Moreover, Solomon highlights the significance of the US Federal Reserve’s role in economic decisions, suggesting the central bank’s actions will be influenced by ongoing political events. He remains less bullish than some on the prospect of a series of interest rate cuts in 2024, citing persistent headwinds that could keep rates higher for an extended period. Despite these challenges, Solomon predicts an upswing in global merger and acquisition activities in 2024 and 2025 compared to the previous year. He attributes this positive trend to renewed confidence, anticipating a return to 10-year averages in transaction volumes over the next 12-24 months, with a notable uptick already observed in M&A activities.