Let's get back now to the world of finance, not that we have left it. I'm pleased to say I'm joined by David Solomon, the group CEO of Goldman Sachs.
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David Solomon
We're certainly excited about what's going on in Saudi Arabia and the GCC. We've been investing and expanding our asset management and wealth management businesses here.
David Solomon
The environment is conducive at the moment. There will be times when it's less so, but we live in a cyclical world. Over the next five to ten years, we expect to continue to grow earnings, client footprint, and compete at the highest levels.
If you just took a snapshot of where everything is trading, equities are at all-time highs, US economy tracking north of 3%, inflation at 3%, and yet somehow the Fed is going to be cutting interest rates by 25 basis points tomorrow. Do you see this as the beginning of a sequential easing cycle or just insurance cuts?
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David Solomon
The Fed will cut rates tomorrow, then we'll see. Consensus expects another cut before year-end. The Fed is moving toward neutral. The real-time economy can shift quickly. US economy is in quite good shape now, but there is uncertainty about the future path of rates.
David Solomon
Overall, the US consumer is in good shape, although inflation pressure is harder on lower income or paycheck-to-paycheck consumers. We should watch inflation carefully to get back to target.
David Solomon
Regarding credit, current situations appear idiosyncratic, not systemic, though a credit cycle will eventually come, likely during an economic slowdown, causing losses. Good lenders prepare for the cycle and smooth returns.
David Solomon
The dollar is down almost 10% year-to-date, but US preeminence, particularly as an investment destination and tech innovation center, remains firmly in place.
David Solomon
AI offers large productivity opportunities; Goldman Sachs is implementing AI to improve client service, efficiency, and risk management over the next 24 to 36 months.