Goldman Sachs CEO Warns of U.S. Economic Slowdown Due to Trade Policies

The Chief Executive Officer of Goldman Sachs has issued a warning about the slowing U.S. economy, following similar concerns raised by the CEO of JPMorgan Chase. The Goldman Sachs CEO emphasized that the trade policies implemented by the U.S. President are negatively impacting the economic outlook. This perspective aligns with the concerns raised by the CEO of JPMorgan Chase, who had earlier indicated that the economy is weakening.

Recent employment data shows signs of economic slowdown, despite an unexpected drop in inflation in August. The Goldman Sachs CEO highlighted the need for close monitoring of these trends, as the ongoing trade negotiations and their implementation continue to introduce uncertainty. This uncertainty, he noted, is undoubtedly affecting economic growth.

The CEO's remarks come in the wake of revised labor market data released by the U.S. government, which showed a downward adjustment of 911,000 jobs over the past year, equivalent to a 0.6% reduction. This adjustment suggests that the average monthly job growth is roughly half of what was previously reported. The U.S. President has used this revised data to pressure the Federal Reserve to lower interest rates more quickly, criticizing the central bank's leadership for lacking the necessary competence.

In response, the Goldman Sachs CEO stressed the importance of the central bank's independence, asserting that it benefits everyone. Earlier in the week, the CEO had stated that the Federal Reserve does not need to rush to lower interest rates, contrasting with the administration's pressure on the central bank. He argued that current policy rates are not overly tight when considering risk preferences and that market investor sentiment is at an optimistic extreme.

The CEO of JPMorgan Chase had previously expressed similar concerns, noting that the revised employment data confirms the economy is weakening. However, he acknowledged that current economic signals are complex. While most consumers continue to spend, confidence may be waning, and corporate profits remain strong. He summarized that the economy contains many different factors, and it remains uncertain whether it is heading towards a recession or just a slowdown.

Despite the concerns, the CEO of JPMorgan Chase believes that the Federal Reserve may lower interest rates later this month but doubts that this action will significantly impact the economy. He suggested that a single monetary policy tool may have limited effectiveness in the current environment.