Goldman Sachs CEO David Solomon said Monday that inflation is “deeply entrenched” in the global economy, and it’s unclear whether that will change this year.
“We see inflation deeply entrenched in the economy, and what’s unusual about this particular period is that both demand and supply are being affected by exogenous events, namely the pandemic and the war on Ukraine,” Solomon told analysts during a call to discuss second-quarter results.
Solomon then pointed to one of the most critical debates occurring in markets right now: It is known that inflation is at multidecade highs; but how long will it persist?
“My dialogue with CEOs operating big global businesses, they tell me that they continue to see persistent inflation in their supply chains,” Solomon said. “Our economists meanwhile say there are signs that inflation will move lower in the second half of the year. The answer is uncertain and we will all be watching it very closely.”
As central banks globally continue to tighten financial conditions to tame inflation, already volatile markets across asset classes will remain choppy, he said.
