Goldman Sachs CEO says recession risk high as company plans to slow hiring
The Federal Reserve has raised interest rates multiple times in 2022 in an effort to combat rising inflation
Goldman Sachs CEO David Solomon said the chance of a recession within the next two years is high amid high inflation and slower hiring.
To prepare for a possible economic decline, the company said Monday it has set aside $667 million to cover any losses as well as plan to slow the pace of hiring, NPR reported.
"It doesn't preoccupy me, but I think the chance of a recession some time in the next 24 months is high," Solomon said.
In an attempt to combat rising inflation, the Federal Reserve has raised interest rates. In June, it raised rates by 75 basis points, the largest rate hike since 1994.
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The Fed's move in June was the third rate hike in 2022, and it is expected to make more hikes throughout the year.
Solomon will headline the Goldman Sachs 10,000 Small Business summit in Washington taking place through Wednesday. A recent Goldman survey of small businesses revealed 93% of small business owners are worried about a recession in the next year, NPR reported.
Solomon said businesses need to be flexible amid the economic uncertainty.
"They are optimistic. They work hard. They are ambitious," he says. "They are fiercely independent in what they do."
In terms of hiring, Goldman is still considered a fiercely competitive place to work.
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"This week, we have about 3,500 undergraduates who are starting their careers here," Solomon told the news outlet. "That's 3,500 out of over 300,000 people that applied for those jobs."