Goldman Sachs CEO David Solomon said Tuesday he thinks financial markets will overcome prevailing uncertainty to settle down for an anticipated rise in mergers with companies going through the public listing process.
“If the level of uncertainty grows from here, yes, you will not see the same amount of capital activity, but things will settle down,” Solomon said in an interview with Bloomberg Television’s Francine Lacqua. “People need to transact, need to raise capital, need liquidity for their investments. Part of this is just a reset of expectations.”
Solomon warned the labor market could see an increase in layoffs as corporations brace for potential downturns and look to control costs. He added that the current level of policy uncertainty, much of which is centered on President Donald Trump’s tariffs, is having a chilling effect on economic growth and investment.
“The policy actions to date have raised the level of uncertainty to a degree I do not think is healthy for investment and growth. As I am talking to CEOs, talking to our clients, they are holding back on investment, and they are certainly tightening their belts,” he added.
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After Trump’s election to a second term in the White House, markets anticipated an uptick in mergers and acquisitions as well as initial public offerings (IPOs) in response to the change in administration.
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That belief followed the Biden administration’s skepticism of proposed mergers and acquisitions, and a number of high-profile deals faced legal challenges that stemmed from concern about their effect on competition.
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Solomon noted in the Bloomberg interview that the first quarter of 2025 saw a higher level of activity in capital markets than in the same quarter last year, so there is potential for more deal-making later this year as long as the uncertainty doesn’t remain elevated enough to keep potential deal-makers on the sidelines.
“If the level of uncertainty grows from here, yes, you won’t see the same amount of capital markets activity. But my own belief is things will settle down. We’ll have a clearer policy perspective and some normalization of capital markets,” Solomon told the outlet.
Original article source: Goldman Sachs CEO says markets will ‘settle down’ after a ‘reset of expectations’
