Goldman Sachs (GS) CEO David Solomon said Monday that the prospect of a recession “has increased” amid the uncertainties of a trade war and the new challenges facing CEOs who are unsure about how to plan for the future.
Solomon made his comments to analysts after releasing first-quarter results showing market trading volatility helped lift overall revenue and profits while investment banking fees dropped, the latest sign of how complicated 2025 is turning out to be for some of the biggest names on Wall Street.
The CEO warned of more challenges to come, saying in a statement Monday that “we are entering the second quarter with a markedly different operating environment than earlier this year” — a nod to the unknowns triggered by President Trump’s aggressive slate of new tariffs.
He told analysts that economic growth had been “slowing down” even before the new trade policies from the Trump administration, and the implementation of those policies “reset the prospect of forward growth pretty significantly all over the world.”
The firm’s corporate and investing clients, he added, “are concerned by the significant near-term and longer-term uncertainty that has constrained their ability to make important decisions,” and the uncertainty about the path forward amounted to “material risk” for the US and global economy.
“The prospect of a recession has increased with growing indications that economic activity is slowing down around the world.”
Overall, first quarter profits at Goldman Sachs rose 15% from the year-ago period to $4.74 billion. Revenues rose 6% to $15 billion.
But dealmaking pulled back. Fees from investment banking dropped 8% from the year-ago period. Advisory revenues earned from helping companies with mergers and acquisitions were down 22%, lower than what analysts expected.
One bright spot was trading, as Goldman benefited from the market volatility surrounding the initial discussion of Trump’s first tariffs in February and March. Equity trading rose a record 27%, and total trading revenue was $8.59 billion — Goldman’s best quarter since it earned $10 billion in the middle of 2009.
Some of Goldman’s rivals on Friday also offered several warnings about the economic uncertainties ahead.
JPMorgan Chase (JPM) CEO Jamie Dimon said the economy faces “considerable turbulence,” even as his bank reported a rise in first quarter profits, and that investment banking “clients have become more cautious amid an increase in market volatility driven by geopolitical and trade-related tensions.”
