In this interview, David Solomon discusses the state of the US economy, highlighting both tailwinds like fiscal stimulus and AI infrastructure build-up, and headwinds such as trade policies and geopolitical fragility. While the upper end of the economy is spending strongly, the lower end faces constraints, and the labor market is softening. Solomon addresses the potential for Federal Reserve interest rate cuts, cautioning against over-optimism. He acknowledges the current bull market and the excitement around AI technology, but anticipates a possible market drawdown. Dealmaking is on the rise, driven by a changed regulatory environment, particularly in the US. Goldman Sachs' priorities include growing their investment banking and trading business, as well as their asset and wealth management platform. Solomon suggests that Europe needs to encourage more risk-taking and consolidate its capital markets to foster tech business growth. He also emphasizes AI's transformative potential across Goldman Sachs, increasing productivity and enabling further investment in growth. While AI may reduce the number of certain jobs, Solomon anticipates overall headcount will increase as the firm expands. He acknowledges the risk of capital misallocation in the AI sector but remains optimistic about its long-term impact.
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