Following JPMorgan's Jamie Dimon, Goldman Sachs CEO also warns of a slowdown in the U.S. economy

Concerns on Wall Street about the outlook for the U.S. economy are intensifying. Following JPMorgan Chase, Goldman Sachs has also issued warnings regarding the U.S. economic outlook.

On Wednesday, September 10, Goldman Sachs Group CEO David Solomon publicly warned that the U.S. economy is softening and pointed out that President Trump's trade policies are impacting growth prospects.

There is no doubt that recent employment data has shown signs of economic weakness, and we must be highly vigilant about this trend.

Solomon stated in a media interview that it is necessary to pay “very, very close” attention to the weak employment data, while particularly emphasizing that the uncertainty surrounding trade policies is dragging down the economy.

Trade negotiations are still ongoing, and there are variables in policy implementation; this uncertainty undoubtedly has a negative impact on economic growth.

Additionally, he mentioned that despite the unexpected decline in producer prices in August, he still sees signs of persistently high prices, adding another layer of complexity to the economic outlook.

Convergence of Views Among Wall Street Giants

Solomon's warning is not an isolated case. On Tuesday, JPMorgan Chase CEO Jamie Dimon had already spoken out in a media interview. He pointed out that the U.S. Labor Department's revised employment data confirms that the economy is weakening.

Wall Street Insight wrote this week that the revised data released by the U.S. Labor Department shows that the U.S. economy's ability to create jobs is significantly below expectations. The downward revision of 911,000 jobs not only exceeded Wall Street's upper expectation but also marked the largest revision in over twenty years.

However, Dimon also acknowledged that current economic signals are complex. He stated that while most consumers are still spending, confidence may be undermined; at the same time, U.S. corporate profits remain “strong.” He summarized, “There are many different factors in the current economy, and we can only wait and see,” but he is uncertain whether the economy is heading toward recession or merely slowing down.

Controversy Over Federal Reserve Rate Cuts

On the policy tools to address economic slowdown, there is a clear divergence between Wall Street's views and those of the White House. Earlier this week, Solomon stated at Barclays' financial services conference that given the enthusiasm of market investors is at the “high end,” he does not feel that the current policy interest rate is “extremely restrictive,” implying that there is no urgent need for rapid rate cuts.

This stance sharply contrasts with the Trump administration's calls for significant rate cuts from the Federal Reserve. In this context, Solomon emphasized the importance of the Federal Reserve's independence, stating that it is important to “recognize how much the independence of the Federal Reserve helps all of us.”

Dimon also expressed reservations about the effects of rate cuts. He expects that the Federal Reserve “might” cut rates later this month, but he believes that such a move may “not have a significant impact on the economy,” suggesting that a single monetary policy tool has limited effectiveness in the current environment