The US economy’s resilience has taken Goldman Sachs CEO David Solomon by surprise. “The US economy has been incredibly resilient, and I would say that I have been surprised over the course of last year,” he told CNBC. At the same time, Solomon warned the commercial real-estate sector faces bumps down the road. Loading Something is loading.
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Goldman Sachs CEO David Solomon said he’s surprised at the way the US economy has weathered higher interest rates, elevated inflation, and banking turmoil over the past year.
Still, the Wall Street bank’s chief warned of pain ahead for the commercial real-estate (CRE) sector due to the Federal Reserve’s aggressive monetary-tightening campaign, according to CNBC.
“The US economy has been incredibly resilient, and I would say that I have been surprised over the course of last year,” Solomon told the outlet.
“We’re still in an uncertain moment,” he said, adding that it’s important to be cautious about the economy. “I think we could muddle through here with a much softer landing than we would have expected,” Solomon said.
The US economy’s robustness was reflected in the recently published employment data, which showed American employers had added a much higher-than-expected 339,000 jobs in May.
On commercial real estate, Solomon said the industry has most definitely come under stress as the Fed boosted interest rates by 500 basis points since early 2022.
“There’s no question that the real-estate market, and in particular commercial real estate, has come under pressure,” he said.
“There will probably be some bumps and some pain along the way,” he added.
The CRE market is currently grappling with a raft of headwinds, including higher borrowing costs, tighter lending standards, and work-from-home trends. Some experts have warned of a crash in commercial property prices.