David Solomon, CEO of Goldman Sachs, recently said that the US economy is a lot more resilient and tough than people believe. He added that although the inflation problem is dragging on, it still doesn't change the facts about the US economy.
From the interview with the Goldman Sachs CEO, it appears that even he acknowledges that the inflation problem is not a light one! And when asked about the weak activity in the capital markets, he added a pick-up is highly expected.
In addition, he also talked about how the adjustment in the capital costs and the valuations during 2022 have effected the capital markets. Keeping these factors in mind, he said that it was not unusual at all.
US Capital Markets To Recover In 2024
When asked about when he expects the US capital markets to start showing strength, he cited the year 2024. In the interview, he made it clear that the chances of a pick-up in the activity will start to show as we enter 2024.
The reason behind this forecast is that people need capital, and that's not going to change, at least for now! After all, some of the activities that are non-essential can be postponed, but this doesn't mean they can be deferred indefinitely.
He also cited how the IPO volumes during Q1 were weak despite a pickup in the block trade and fundraising activities.
Keeping his comments aside for a moment, the current challenges faced by the US economy include weak exports, sticky inflation, and high-interest rates. And despite all the positive comments by Goldman Sachs, the fundamental outlook is still the same.
Talking about inflation, it appears that it will start to go down or even under the Fed's target somewhere later in 2024. The best guess will be the 2H2024 but its still too soon to talk about 2024 while living the 2023.