Goldman Sachs chief executive David Solomon has indicated that the Federal Reserve does not need to rapidly cut interest rates, a view that contrasts with the Trump administration’s push for looser monetary policy. Speaking at a Barclays financial-services conference, Solomon stated that current risk appetite suggests the policy rate is not excessively restrictive, noting investor enthusiasm in markets is high.
Solomon’s remarks come as Federal Reserve policymakers are widely expected to lower rates by a quarter of a percentage point at their upcoming meeting. Market expectations also point towards further rate reductions before the end of the year. However, JPMorgan analysts suggest that a rate cut at the September 17 meeting could trigger a ‘Sell the News’ event, potentially leading to investor pullback.
The debate over interest rates has intensified, with US Treasury Secretary Scott Bessent advocating for a cycle of rate cuts, suggesting the Fed’s benchmark should be significantly lower. Meanwhile, Beth Hammack, President of the Federal Reserve Bank of Cleveland and former colleague of Solomon, has also expressed reservations about lowering rates this month, citing inflation data that remains above the central bank’s 2 per cent target and appears to be trending upwards. Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of financial services to a substantial and diversified client base.
