Solomon, CEO of Goldman Sachs Group, said that as the global economy recovers and gradually gets rid of the impact of the epidemic, the market may face a difficult period.
Speaking at the Bloomberg Innovation Economy Forum in Singapore on November 16, Solomon said:
I look back on my 40-year career, there was a time when greed in the market far outweighed fear, and we are now in a period like this. But my experience shows that this period doesn't last long, and there are things that put the two back in balance.
Under the massive fiscal stimulus, global stock markets rose sharply during the epidemic, which also stimulated the profits of banks such as Goldman Sachs. As prices continue to rise and inflation concerns intensify, central banks could be forced to raise interest rates. In addition, U.S. inflation has exploded, the Fed has begun to taper, and the market's expectations for its interest rate hike next year are getting stronger and stronger.
Solomon further pointed out that interest rates may rise back, and that if interest rates rise, they will weaken the prosperity of the market.
In addition, Solomon discussed the challenges of climate change, saying the transition to a green economy is very important. It is worth mentioning that Goldman Sachs, one of the banks, investors and insurance companies that pledged to decarbonise by 2050 earlier this month, became a member of the Glasgow Net Zero Financial Alliance.
However, the proposal has been called into question, with some climate activists and nonprofits questioning the ability of large financial institutions to move away from fossil fuels. Goldman Sachs and other companies have previously made it clear that it is not feasible to stop working with related industries.
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