Goldman Sachs CEO David Solomon explores America's small businesses, markets and more.

MeLess than a day after Goldman Sachs reported its second-quarter earnings, the company beat Wall Street expectations with strong fixed-income trading earnings, but CEO David Solomon has already turned his attention elsewhere. I’m here.

The global banking giant brings to Washington, D.C. its 10-year-plus mission to help America’s small businesses through its 10,000 Small Businesses program, convening the largest gathering of business leaders in U.S. history, lobbying Congress, and advocating for the sector. I asked for more help. Overhaul of the US Small Business Administration (SBA).

“Small businesses face tremendous challenges during the pandemic and now. [it]is dealing with inflation in the economy,” says Solomon.

Through the initiative, with Warren Buffett, Michael Bloomberg and Mary Barra as advisors, Goldman Sachs has generated $17.3 billion in combined revenue and employed more than 250,000 workers since the program began in 2008. We have trained and funded over 12,800 entrepreneurs we have hired.

Now, after navigating unprecedented economic challenges over the past two-and-a-half years from the Covid-19 pandemic, 93% of businesses recently surveyed by Goldman believe they are headed for a U.S. recession, and 89% report broader economic developments, including inflation. , supply chain and workforce challenges still hit hard. This is particularly troubling as small employers account for 64% of new jobs created in the US, according to the SBA.

“It’s no surprise that a high percentage of these business owners are worried about a recession,” Solomon said, noting that historically, tightening cycles with inflation are usually followed by recessions. I’m here.

But while Solomon still doesn’t believe such a fate is “baked into the cake,” Jan Hatzius, the bank’s chief U.S. economist, predicts the next 12 months. It points out that it may be about 30%. Executives at large companies say sentiment is “slightly higher” than their company’s view.

The rapidly changing economic environment combined with the war and asset de-risking in Ukraine has hit business activity, with capital market activity “poor” in the first half of the year, Solomon said. “Last year was an anomaly, I said when it happened,” Solomon says. “But this [year] is no exception … conversely, there have been few years of low capital market activity. Because business has to move forward. ” Solomon predicts that capital markets activity could pick up later this year or into next year.

And while public fears about the impending economic crisis loom large, 61% of business owners surveyed remain optimistic about their businesses and their ability to move their businesses forward. “The U.S. economy is very resilient,” says Solomon. “I can’t predict if there will be a recession, but I know we will get through this.”

“The U.S. economy is very resilient. I can’t predict whether we will have a recession or not, but I know we will weather it.”

In terms of how banks will advise customers and business owners in the near future, Solomon believes discipline is key. “The key is to stay focused on what you can control … and make sure resources are allocated where they are really productive,” he says. “While we see if we can navigate this with a soft landing, we’ll have to be a little more careful.”

For Goldman himself, that means raising its near-term risk profile and reducing the pace of hiring.

“We have grown the company significantly over the last few years, and we were planning a large hiring later this year,” explains Solomon. “Next year we will significantly slow down the hiring pace, please do not There is a hiring freeze.we’re still going to finish our growth [overall] This year’s headcount is very significant and my guess is that next year it will increase again, [just] at a slow pace. ”

Solomon’s North Star, a company navigating the current uncertainty, continues to focus on the long term. “The trick in this environment is that you should always invest in your business for the long term,” he says. It’s okay to wait for the dust to settle a bit.

“Until the trajectory of the economic environment becomes more certain, we need to be a little more cautious,” says Solomon. “And I think a little caution goes a long way.”