Goldman Sachs Group Inc. is planning for a period of sluggish growth and higher inflation, the bank’s president John Waldron said on Thursday, calling it “a mini-stagflation scenario”.
There will be a tougher environment for capital markets and financing as CEOs remain cautious, Waldron told a Bloomberg conference on Thursday.
“We’re planning for that scenario to be more likely, doesn’t mean it will happen,” he said.
Despite the US economy showing resilience, concerns remain among investors that a recession could happen in an environment of stubborn inflation and high borrowing costs.
There are uncertainties on the degree of the economic slowdown, with many fearing that the impact of higher interest rates has yet to be fully felt in areas such as private credit, or real estate.
Waldron said he cannot say anything with certainty about more job cuts at the group, but reiterated that “we are running the firm tighter, we are being more cautious.”
The firm is expected to cut just under 250 jobs in the coming weeks, a source familiar with the matter told Reuters in May. In January, it let go about 3,200 employees, its biggest head count reduction since the 2008 financial crisis.
Waldron also said risk appetite for its clients is lower.
By Saeed Azhar and Tatiana Bautzer / Reuters