“There’s a reasonable chance of a recession in the U.S., but it’s not certain,” Solomon said on Tuesday after the company released third-quarter earnings. “I could still see a scenario with a soft landing.”
Solomon’s comments echoed those of JPMorgan & Co CEO Jamie Dimon in expressing caution about the economic outlook. Their counterpart at Bank of America Corp, Brian Moynihan, has been more optimistic, pointing to the healthy finances of consumers and businesses.
Solomon also talked about the challenges facing private equity buyers, saying deal activity in the buyout sector has slowed.
“Private equity activity gets reset at a time like this because values have to come down because financing costs have gone up,” he said. “So there’s been less private equity activity right now.” A steep fall in large private-equity buyouts contributed to the slowdown in global dealmaking, with third-quarter activity dropping 54% to $716.62 billion from $1.56 trillion in the same period last year, according to Dealogic data.