Ken Leon, director of equity research at CFRA, and Michael Lee, founder of Michael Lee Strategy, discuss bank earnings and rising interest rates on “Mornings with Maria.”
CEO of Goldman Sachs David Solomon expects the next government to take a more business-friendly approach and shift its focus to deregulation.
It's a move he argues will spur economic growth and business profits across the country.
“The regulatory pendulum has swung pretty hard over the last 3 or 4 years,” Solomon said during a panel discussion at the National Retail Federation's (NRF) 2025 trade show. In turn, senior executives were forced to hold back on investments due to regulatory pressures, Solomon said.
“This administration has sent a clear message that they want to swing that pendulum back,” said Matt Shay, CEO of Solomoto NRF. This is very productive for growth and investment.”
“The tone of deregulation is a very powerful catalyst for investment,” Solomon continued.
New York-based investment firm Invesco released a report last month that also showed how it foresees an “excessive deregulation environment” that could spur economic growth.
“Regulatory reforms – particularly those that liberalize entry into markets – are likely to stimulate investment while tighter industry regulation deters investment,” the firm wrote. “Furthermore, a deregulated environment can have a psychological effect, unleashing 'animal spirits' not only in the economy but also in the markets.”
David Solomon, chief executive of Goldman Sachs Group Inc., during a Bloomberg Television at Goldman Sachs Financial Services Conference in New York, U.S., on Tuesday, Dec. 6, 2022. (Michael Nagel/Bloomberg via Getty Images/Getty Images)
But Goldman Sachs' chief executive warned that as the new government takes office and begins to implement policies that “some of them could be quite constructive, some of them have the potential to dampen growth.” There will be a “cocktail of change”. “I think what we have to watch carefully is how everything is balanced.”
After President-elect Trump's victory in November, Goldman Sachs He had released a forecast for the US and world economies that showed how his administration's planned tax cuts would boost growth, although more aggressive tariffs could dampen that effect.
The Goldman Sachs logo is seen on the New York Stock Exchange (NYSE) in New York City, New York, United States. (Reuters/Andrew Kelly/File photo/Reuters photo)
Goldman Sachs economists led by Jan Hatzius forecast that the U.S. economy should grow by about 2.5 percent in 2025, according to its baseline forecast, assuming the second Trump administration The new tax cuts will bring easing regulations, reduced immigration, as well as higher tariffs on Chinese goods and imported cars.
Their main ones don't include a blanket 10 percent tariff on all imports, which Trump campaigned on, or the deportation program — both of which, if implemented, could have the effect of suppressing economic growth.
| ticker | security | the last | change | change % |
|---|---|---|---|---|
| JS | Goldman Sachs Group | 626.00 | +13.05 |
+2.13% |
“We think there are offsetting effects: negative from tariffs and immigration, positive from fiscal policy and regulatory changes,” Hatzius said earlier. “And when we put this into our models, we get neutralizing effects rather than a large net effect.”
Eric Rolle of FOX Business contributed to this report.