Goldman Sachs (GS) CEO David Solomon is warning of a “reckoning” related to U.S. government debt should the economy slow down and enter a recession.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
“If we continue on the current course, and we don’t take the growth level up… there will be a reckoning,” said Solomon when speaking to the Economic Club of Washington, D.C. The CEO of Goldman Sachs, a leading Wall Street investment bank, added that, “We should be concerned about this… I do think over time, this is an issue.”
Solomon’s comments come with the U.S. national debt sitting at $38 trillion and counting. Solomon noted that since the 2008 financial crisis, the debt of the U.S. federal government has grown 443%, rising from $7 trillion to nearly $40 trillion.
Recession Risks
“The pandemic played an accelerating role, and it doesn’t seem like we have the ability to pull it back,” said Solomon in prepared remarks to the Economic Club. He added that the U.S. economy remains in good shape, minimizing chances of a recession in the near term. However, should the American economy enter a recession, risks related to the U.S. government’s debt could accelerate, he said.
Solomon used his remarks to also discuss the U.S. dollar. He said that while the greenback has been weakening relative to other currencies, he doesn’t see its status as the world’s reserve currency ending anytime soon. “I’m not concerned that there’s some fundamental shift,” he said.
Is GS Stock a Buy?
The stock of Goldman Sachs has a consensus Moderate Buy rating among 12 Wall Street analysts. That rating is based on five Buy and seven Hold recommendations issued in the last three months. The average GS price target of $824.50 implies 3.40% upside from current levels.
