Goldman Sachs CEO David Solomon is both optimistic and cautious about the uncertain economic landscape of 2025 and beyond – a sentiment that underscores the need for careful risk management in the face of potential opportunities and challenges ahead.
In an interview with the Financial Times, Solomon describes the economy as being in a "fragile place," while balancing potential upsides and downsides. He warned that specific economic conditions could either stimulate or stagnate growth, while also potentially increasing government debt, which has already impacted bond markets. This delicate equilibrium underscores the complex challenges facing the economy in the coming years.
Solomon observed that the Biden administration's regulatory policies have led to hesitation among CEOs regarding new investments.“[The Trump administration] has sent a clear message that they want to back that off,” he said. “That’s very constructive for growth and investment, and so I think that’s a positive.” Tax cuts could be stimulative, he added.
These views are not new to the CRE community and there has been healthy debate about how stimulative Trump’s policies actually will be.
“Real estate is hyper-localized,” Alain R'bibo, a partner at real estate law firm Allen Matkins, told GlobeSt.com last month. “There’s nothing that Trump is going to do that’s going to speed up my entitlements or affect rent control. I think the discussion is a little bit overblown or premature. But the whole perception of an administration coming in that is seen as business-friendly and anti-regulation has been seen as welcome by the real estate community.”
At the same time, “there are other things that the administration is talking about that we really need to see how they go forward,” Solomon also told the FT. That includes tariffs on major trading partners, which could put pressure on nearshoring and industrial CRE as a result.
His concerns also apply to immigration. Solomon sees controlled borders as important. “But when you think about deportations, it’s very, very important that we balance all that with continued immigration growth, and we’ve got to get that balance right,” he said.