"Goldman Sachs CEO: Fed's Rate Hike Campaign Poses Systemic Shock"

Goldman Sachs CEO David Solomon warns that the U.S. economy may experience a slowdown in economic activity and that the Federal Reserve may continue its rate hike campaign. Solomon believes that inflation, particularly in labor, will have an impact and expects the Fed to act accordingly if inflation picks up. While the Fed decided to pause rate hikes last month, the market is now feeling the impact. Mortgage rates are rising, causing a slowdown in home sales as potential buyers balk at the cost. Solomon does not anticipate interest rates reaching the levels of the 1970s or 80s but acknowledges that the sudden change after a period of accommodative monetary policy can be a shock to the system. He expresses confidence in the resilience of the U.S. economy but cautions that it may be more fragile heading into 2024 due to global and geopolitical uncertainties.