Post-Pandemic Markets Recovery Shows Greed is Outpacing Fear, Says Goldman Sachs CEO

Greed is outpacing fear in world financial markets as investors respond to the pandemic recovery, Goldman Sachs Chief Executive David Solomon says, adding that such periods of exuberance are usually not long-lived.

Solomon told Bloomberg's New Economy Forum in Singapore on Wednesday the global economy was facing a 'complicated time' as activity began to strengthen after the sudden shutdown in many parts of the world in 2020 because of coronavirus.

US stocks
People queue beside the bronze bull in the Financial district which has become a Wall Street icon in New York City, July 18, 2013. U.S. stocks continued to rise on Thursday, sending the Dow Jones Industrial Average and the S&P 500 to fresh all-time highs, boosted by upbeat economic data and corporate earnings. IANS

Unprecedented Levels of Stimulus

The unprecedented levels of stimulus ordered by governments and central banks, he said, had led to exuberance in certain markets.

"I think markets generally when I step back and I think about my 40 year career, there's been periods of time when greed has far outpaced fear. We were in one of those periods of time," Solomon told the Singapore event.

"We were in one of those periods of time and generally speaking, my experience says that, you know, those periods are not long-lived."

US stocks
A trader works at the New York Stock Exchange in New York, the United States, on Feb. 5, 2018. U.S. stocks closed sharply lower on Monday, with the Dow plummeting 4.60 percent, as the market took a heavy hit from panic sales. IANS

Solomon said the expectation of rising interest rates could reduce the heat in some asset markets.

"Something will rebalance it and bring a little bit more perspective. And given it feels like inflation is running above trend, chances are interest rates will move up and that will take some of the exuberance out of certain markets," he said.

Related topics : Coronavirus