WEBVTT - Goldman Sachs CEO David Solomon Talks Markets

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio News.

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<v Speaker 2>I'm delighted to speak to the Golden Sachs Chief executive

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<v Speaker 2>David Solomon. David, thanks so much for joining us. First

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<v Speaker 2>of all, welcome to Oslo, Norway. I know we'll talk

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<v Speaker 2>about Europe, but we have to start with Trump policies.

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<v Speaker 2>It's been one hundred days since the inauguration, Like where

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<v Speaker 2>are we?

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<v Speaker 1>We've seen a lot of volatility. How would you describe

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<v Speaker 1>this moment in time?

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<v Speaker 3>Well, first of all, thank you for having me, and

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<v Speaker 3>it's good to be with you, you know, here in Oslo.

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<v Speaker 3>Four one hundred days in, and I would say there

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<v Speaker 3>are a handful policy initiatives that.

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<v Speaker 1>Are being put forward.

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<v Speaker 3>Some of them certainly are very very interesting and intriguing

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<v Speaker 3>to the market. But what's been put forward on trade

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<v Speaker 3>so far has raised the level of uncertainty very significantly.

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<v Speaker 3>And so i'd say one hundred days in, we need

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<v Speaker 3>another one hundred days to kind of see where the

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<v Speaker 3>policy directives are going and to try to have a

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<v Speaker 3>better understanding of how what's talked about so far, particularly

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<v Speaker 3>with respect to trade, is ultimately going to be put

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<v Speaker 3>in place, how it's going to play out. But the

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<v Speaker 3>policy actions to date have raised the level of uncertainty

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<v Speaker 3>to a degree that I don't think is healthy for

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<v Speaker 3>investment and growth, and I think it's going to be

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<v Speaker 3>important that we get more clarity on the direction of

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<v Speaker 3>travel from here.

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<v Speaker 1>For the markets.

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<v Speaker 2>So if you look at markets, there's been a sum

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<v Speaker 2>off for pretty dramatic self in US assets, it's somewhat

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<v Speaker 2>come back, but hasn't been too drastic.

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<v Speaker 3>Well, it's not just for the markets, you know, first

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<v Speaker 3>and foremost, it's for businesses. It's for individuals. When there's

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<v Speaker 3>a high level of uncertainty, people tighten the belt, they

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<v Speaker 3>invest less, they spend less, and all those things slow

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<v Speaker 3>down growth. And so you know, one of the things

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<v Speaker 3>that has happened over the course of the first one

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<v Speaker 3>hundred days is that the perspective on forward growth has

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<v Speaker 3>been decreased. And so when you decrease that perspective on

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<v Speaker 3>forward growth, that changes investor's perspective of equity values. So

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<v Speaker 3>what we've seen is a relatively orderly kind of repricing

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<v Speaker 3>of equity assets. And what's unusual on the context of

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<v Speaker 3>this we're pricing is generally when you have that kind

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<v Speaker 3>of equity market stress, people run to treasuries or safe haven.

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<v Speaker 3>But here we're seeing a slightly different rotation because of the.

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<v Speaker 1>Nature of the policy.

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<v Speaker 3>We've seen a weakening of the dollar, you know, at

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<v Speaker 3>the margin, and so that's been different than I think

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<v Speaker 3>what people expected.

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<v Speaker 2>Our treasury is still safe haven.

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<v Speaker 3>I think US treasuries absolutely are safe haven, but you

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<v Speaker 3>can reprice a safe haven asset as people's preferences shift slightly,

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<v Speaker 3>you know. I think at the margin, we've had for

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<v Speaker 3>a long period of time a trend of capital flows

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<v Speaker 3>into US assets, and you know, at the margin, people

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<v Speaker 3>are looking at their portfolio constructions and saying, given the

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<v Speaker 3>uncertainty that's been raised in the US, do we want

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<v Speaker 3>to rebalance that a little bit? And I'd say the

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<v Speaker 3>rebalancing so far has been at the margin. Investors can

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<v Speaker 3>rebalance their portfolio in two different ways. If you're over

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<v Speaker 3>here in Europe, and if European investor, they can sell

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<v Speaker 3>US assets, but also if the relationship between the dollar

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<v Speaker 3>and the euro changes, that rebalances their portfolio waiting too,

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<v Speaker 3>and so we've seen that over the.

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<v Speaker 1>Course of the last few weeks.

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<v Speaker 2>So investors are asking a risk premium, a pretty hefty

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<v Speaker 2>risk premium to own US assets at the moment, even

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<v Speaker 2>if there's a reversal in terms of terrorists, does it

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<v Speaker 2>come back to what it was like or is there

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<v Speaker 2>a permanent change.

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<v Speaker 3>Well, I'm not sure that they're asking a pretty hefty

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<v Speaker 3>risk premium. They're certainly asking a different premium than where

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<v Speaker 3>we were three months ago.

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<v Speaker 1>But I think everything's got to be looked at, you know,

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<v Speaker 1>in a broader perspective.

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<v Speaker 3>You know, the moves have been real in terms of

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<v Speaker 3>the repricing of equities, particularly some of the growth stuff,

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<v Speaker 3>the Magnificent seven, some of these stocks, you know that

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<v Speaker 3>really led the last rally. But i'd also you know,

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<v Speaker 3>step back and just say, you know, when you look

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<v Speaker 3>at where stocks were a year ago, when you look

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<v Speaker 3>at where stocks were six months ago, you know, we

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<v Speaker 3>had a big move up in the early part of

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<v Speaker 3>the year, and we've.

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<v Speaker 1>Kind of reset to kind of where we were, you know,

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<v Speaker 1>six and twelve months ago.

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<v Speaker 3>What's really important is people need to understand the policy

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<v Speaker 3>set going forward and the prospects.

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<v Speaker 1>For growth going forward.

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<v Speaker 3>And at the moment, as I said to you a

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<v Speaker 3>few minutes ago, the level of uncertainty is just too high.

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<v Speaker 3>And so until we have more certainty about the policy directive.

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<v Speaker 3>It's hard for you to see more capital allocation, more investment.

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<v Speaker 2>Does the dollar remain a reserve currency?

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<v Speaker 1>Absolutely in ten years, twenty years.

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<v Speaker 3>I absolutely think the dollar is going to be the

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<v Speaker 3>reserve currency. But the value of the dollar relative to

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<v Speaker 3>other alternatives can shift. And I do think over time

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<v Speaker 3>the US needs to be very focused on our levels

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<v Speaker 3>of debt, are deficit spending, etc. And I think to

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<v Speaker 3>the degree that we don't handle that appropriately, it can

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<v Speaker 3>put more pressure on the dollar. But I don't see

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<v Speaker 3>a scenario in the near term where I think it's

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<v Speaker 3>likely that the dollar is not the reserve currency.

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<v Speaker 1>For the world.

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<v Speaker 2>So I know you're basically saying, look, keep a cool

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<v Speaker 2>head until we have a better understanding, right, some of

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<v Speaker 2>the policies put in place, But what does it do

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<v Speaker 2>to the US economy going forward? Does it mean, you know,

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<v Speaker 2>does a FED need to cut rights?

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<v Speaker 1>Because if I'm certain growth, well, I think it depends.

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<v Speaker 3>You know, Golden Sacks has lowered its growth forecast from

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<v Speaker 3>two percent two point five percent. You know, I'm not

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<v Speaker 3>It's not clear how this will all play out in

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<v Speaker 3>the coming months. No one really knows. But to the

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<v Speaker 3>degree that the economy slows, you know, ultimately, the.

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<v Speaker 1>FED will try to act to buffet, you know, some

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<v Speaker 1>of that slow down in the economy.

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<v Speaker 3>To the degree that we go into recession, you know,

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<v Speaker 3>that will lead to a different reaction. So again, the

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<v Speaker 3>FED will look at the data. We'll look at the information,

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<v Speaker 3>they'll look at labor, the look at growth.

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<v Speaker 1>And they'll make decisions based on that.

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<v Speaker 3>Everyone wants to project forward and know the answer for

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<v Speaker 3>a moment in time where it's more uncertain than makes

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<v Speaker 3>everybody comfortable, and I just you know, I just.

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<v Speaker 1>Say, it's a moment in time.

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<v Speaker 3>Let's you know, step back, Let's see how some of

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<v Speaker 3>these trade deals are cut. Let's see what policy actually

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<v Speaker 3>does go into place, and that will help us better

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<v Speaker 3>understand the forward growth trajectory. But it's clearly been slowed

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<v Speaker 3>by these actions. And I'm talking to CEOs, as I'm

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<v Speaker 3>talking to our clients, they are holding back on investment

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<v Speaker 3>and they're certainly tightening their belt. You're going to see

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<v Speaker 3>some companies laying off, you know, employees and running their

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<v Speaker 3>businesses tighter because of this level of uncertainty.

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<v Speaker 2>We're you surprised, and are your client surprised that it's

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<v Speaker 2>hit growth maybe more than inflation.

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<v Speaker 3>You know, I think you're gonna have pressures on both fronts.

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<v Speaker 3>But again it depends. It's one thing to talk about

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<v Speaker 3>reciprocal tariffs, but from an inflation every perspective, it actually

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<v Speaker 3>depends on what tariffs go into place.

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<v Speaker 1>With respect to growth, There's no question.

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<v Speaker 3>The uncertainty slows down growth, and so everyone's growth forecasts

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<v Speaker 3>have come down, by the way, not just in the US.

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<v Speaker 3>This affects global growth everywhere, and so the forward trajectory

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<v Speaker 3>of growth, given the current policy initiatives, has slowed. And

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<v Speaker 3>now we're going to have to wait and see how

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<v Speaker 3>this all moves forward to have a clearer sense of

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<v Speaker 3>how much.

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<v Speaker 1>How long, et cetera. Where's China and all of this.

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<v Speaker 3>Well, China is a hugely important and trading partner, you know,

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<v Speaker 3>to the West, to the US, to Europe.

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<v Speaker 1>At the moment, we're in the early stages of what

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<v Speaker 1>I think.

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<v Speaker 3>Is an obvious negotiation between the US and China, and

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<v Speaker 3>we need more clarity. But the current state of affairs

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<v Speaker 3>is not sustainable, and so that's why I think there

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<v Speaker 3>will be some change. We're starting to hear the administration,

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<v Speaker 3>you know, talking about the fact that there needs to

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<v Speaker 3>be changed and what's in place is not sustainable. But

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<v Speaker 3>no one knows exactly how this will play out at

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<v Speaker 3>the moment, and that's that's increasing the level of uncertainty.

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<v Speaker 2>Devid when you look at you know, a lot of

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<v Speaker 2>investors and I think also Goldman Sachs did quite a

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<v Speaker 2>lot in the Middle East.

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<v Speaker 1>Is this one of your.

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<v Speaker 2>Main points of focus? And is that in case, you know,

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<v Speaker 2>things dry up in the US or is it just

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<v Speaker 2>business sense to go for the New East right now?

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<v Speaker 3>Well, the Middle East is a very very interesting business

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<v Speaker 3>opportunity for firm like Goldman Sachs. They have enormous capital

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<v Speaker 3>resources that they export around the world and they invest.

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<v Speaker 3>We want a big asset in wealth management business and

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<v Speaker 3>there are you know, many of these these Middle Eastern

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<v Speaker 3>nations and their pensions and their funds are partners of

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<v Speaker 3>ours and other asset management firms all over the world.

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<v Speaker 1>You know, I think that continues.

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<v Speaker 3>It's not a function of the US Ralliot.

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<v Speaker 1>The US is thirty five percent of consumption in the world.

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<v Speaker 1>That's not changing.

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<v Speaker 3>Okay, that's not changing. The US is a very very

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<v Speaker 3>attractive market. I think Middle Eastern investors appreciate that opportunity

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<v Speaker 3>as they appreciate opportunities in Europe and other.

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<v Speaker 1>Parts of the world. I think one of the most

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<v Speaker 1>interesting things about what's going on is.

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<v Speaker 3>It would be really good for global growth and good

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<v Speaker 3>for the global economy if Europe can make more progress

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<v Speaker 3>on capital markets reform, European champions really bringing together and

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<v Speaker 3>harnessing the power of the European Union.

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<v Speaker 1>And one of the things I'm encouraged by as I'm over.

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<v Speaker 3>Here visiting in Europe right now is I definitely take

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<v Speaker 3>away a sense of resolve, of excitement about actually moving

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<v Speaker 3>forward breaking down some of the regulatory bars that have

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<v Speaker 3>been inhibition to growth here, and I think that would

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<v Speaker 3>be quite constructive and more stimulative. Fixedtal action here in

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<v Speaker 3>Europe also would be quite constructive for growth. So you know,

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<v Speaker 3>there gives and gets, but it would be really terrific

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<v Speaker 3>to see some progress on the economic trajectory of Europe

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<v Speaker 3>holistically here. And I'm encouraged by some of the things

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<v Speaker 3>I'm hearing from our clients over here.

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<v Speaker 2>Where do you see opportunities in Europe? And again, is

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<v Speaker 2>there like a six month window where if Europe doesn't

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<v Speaker 2>get it sacked together it's.

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<v Speaker 1>Just two lights.

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<v Speaker 3>No, I think you know, there's never just a six

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<v Speaker 3>month window, okay here or in the US. You know,

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<v Speaker 3>it's a great sound bite, but these are big, important economies.

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<v Speaker 1>I do think that European.

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<v Speaker 3>Growth has been hampered by a very complex regulatory environment,

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<v Speaker 3>particularly in Brussels, and by a sense that many of

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<v Speaker 3>the nations have acted, you know, more nationalistically than holistically.

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<v Speaker 3>I think given what's going on with the US, there's

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<v Speaker 3>really a push to break down some of that regulatory bureaucracy,

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<v Speaker 3>to really think about how European champions can be bolstered

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<v Speaker 3>and there can be more investment. And I think that's

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<v Speaker 3>a big opportunity. There's more tech innovation going on here.

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<v Speaker 3>It doesn't quite match up or compared to what's going

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<v Speaker 3>on in the US, but there's more opportunity here. And so,

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<v Speaker 3>you know, I'm hopeful that this is a moment in

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<v Speaker 3>time where we can see greater investment and a greater

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<v Speaker 3>sense of the opportunity of europolistically, and that would be

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<v Speaker 3>quite constructive.

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<v Speaker 1>For global growth if we could see some progress on that.

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<v Speaker 2>We're talking about regulation. What are you expecting regulations for

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<v Speaker 2>banks to look like in the US? Just do rip

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<v Speaker 2>up some of the regulators.

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<v Speaker 3>Well, I think we saw an enormous pendulum swing in

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<v Speaker 3>the last four years toward a much tougher financial.

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<v Speaker 1>Regulatory environment in the US.

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<v Speaker 3>I don't think it was constructive, and I do think

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<v Speaker 3>from a positive perspective, this administration would like to reset that.

0:10:56.440 --> 0:11:00.560
<v Speaker 3>I'm hearing some very constructive things along three fronts. One

0:11:00.559 --> 0:11:03.760
<v Speaker 3>obviously is the leverage ratio, which is very very important

0:11:03.760 --> 0:11:06.800
<v Speaker 3>for the treasury market. Two is on the capital regime

0:11:07.280 --> 0:11:11.240
<v Speaker 3>and c CAR and GCID and the construct of how

0:11:11.280 --> 0:11:15.240
<v Speaker 3>bank capital is calculated. And third is just on the

0:11:15.240 --> 0:11:19.880
<v Speaker 3>supervisory process. Supervisory process should be focused on ensuring that

0:11:20.040 --> 0:11:22.040
<v Speaker 3>we have a safe and sound banking system and it

0:11:22.080 --> 0:11:26.480
<v Speaker 3>shouldn't get distracted into other areas. And so I'm encouraged

0:11:26.480 --> 0:11:29.439
<v Speaker 3>by what I hear out of Treasury. I'm encouraged by

0:11:29.440 --> 0:11:31.199
<v Speaker 3>what I hear more bloodly, and so I do think

0:11:31.200 --> 0:11:34.560
<v Speaker 3>there's an opportunity to take that pendulum which really was

0:11:34.559 --> 0:11:38.080
<v Speaker 3>an inhibitor to growth, free up some capital, get that

0:11:38.120 --> 0:11:41.400
<v Speaker 3>capital we cycled into the system, increase lending activity, and

0:11:41.440 --> 0:11:43.960
<v Speaker 3>so I'm quite constructive that we're going to see some

0:11:44.000 --> 0:11:47.240
<v Speaker 3>positive change on the front of financial regulation.

0:11:47.320 --> 0:11:47.920
<v Speaker 1>In the US.

0:11:48.240 --> 0:11:49.640
<v Speaker 2>How quickly did that come?

0:11:50.520 --> 0:11:52.679
<v Speaker 3>I think we'll see, we'll see the beginnings of that

0:11:52.760 --> 0:11:55.120
<v Speaker 3>in the coming months. And you know, certainly, if you

0:11:55.120 --> 0:11:57.000
<v Speaker 3>and I were sitting here a year from now, I

0:11:57.040 --> 0:11:59.560
<v Speaker 3>would hope I could point to a handful of very

0:11:59.600 --> 0:12:02.400
<v Speaker 3>specific things that have swung that pendulum back to a

0:12:02.440 --> 0:12:03.439
<v Speaker 3>more constructive place.

0:12:03.880 --> 0:12:07.079
<v Speaker 2>Do you think Europe then follow suits and deregulating at

0:12:07.080 --> 0:12:09.920
<v Speaker 2>the margins or otherwise it puts European banks.

0:12:09.679 --> 0:12:12.000
<v Speaker 3>In a very difficult position into well, I think one

0:12:12.080 --> 0:12:15.280
<v Speaker 3>of the issues for Europe is that the banking system

0:12:15.320 --> 0:12:19.120
<v Speaker 3>in Europe has not come along over the last fifteen

0:12:19.200 --> 0:12:21.240
<v Speaker 3>years the same way as the US banking system.

0:12:21.280 --> 0:12:22.679
<v Speaker 1>As you know, when.

0:12:22.480 --> 0:12:26.080
<v Speaker 3>You look at Europe, whether you're looking at you know,

0:12:26.200 --> 0:12:30.400
<v Speaker 3>BNP is probably the largest European bank, with probably a

0:12:30.440 --> 0:12:34.520
<v Speaker 3>seventy seventy five billion dollar market cap. You know today

0:12:34.920 --> 0:12:37.120
<v Speaker 3>UBS would be larger than that, but just over one

0:12:37.160 --> 0:12:37.840
<v Speaker 3>hundred billion.

0:12:38.160 --> 0:12:41.520
<v Speaker 1>You know, there are obviously lots of institutions.

0:12:40.840 --> 0:12:43.600
<v Speaker 3>In the United States that are bigger, broader, much larger

0:12:43.679 --> 0:12:46.560
<v Speaker 3>market caap banks, and so in the context of that

0:12:47.160 --> 0:12:51.000
<v Speaker 3>consolidation and growth in Europe and a capital markets union

0:12:51.080 --> 0:12:53.440
<v Speaker 3>in Europe would be a very constructive thing for the

0:12:53.440 --> 0:12:56.679
<v Speaker 3>capital markets more broadly. But Europe's been slow to make

0:12:56.720 --> 0:12:59.360
<v Speaker 3>progress in that. I'm hopeful that we'll see more progress

0:12:59.360 --> 0:13:01.160
<v Speaker 3>in the coming twelve to twenty four months.

0:13:01.559 --> 0:13:03.120
<v Speaker 2>If there's a lot of talk about credits and of

0:13:03.120 --> 0:13:05.400
<v Speaker 2>course private equity and some of the old turn for investments,

0:13:05.400 --> 0:13:07.839
<v Speaker 2>and also Goldman's trying to take advantage of how much

0:13:07.880 --> 0:13:10.240
<v Speaker 2>does that grow in these uncertain times.

0:13:12.040 --> 0:13:14.280
<v Speaker 3>Well, when there's a higher level of uncertainty, the growth

0:13:14.800 --> 0:13:19.720
<v Speaker 3>of private capital slows, just like the growth of you know,

0:13:19.760 --> 0:13:23.119
<v Speaker 3>asset management business and public capital slows too when there's uncertainty.

0:13:23.920 --> 0:13:25.800
<v Speaker 1>But I think the long term secular.

0:13:25.400 --> 0:13:29.920
<v Speaker 3>Growth trends around private capital formation are solidly intact. And

0:13:30.040 --> 0:13:31.840
<v Speaker 3>if you step back and you step out of this

0:13:31.880 --> 0:13:33.800
<v Speaker 3>moment in time, you know, I think with a five

0:13:33.880 --> 0:13:35.960
<v Speaker 3>or ten year view, we still have very good secular

0:13:36.000 --> 0:13:39.520
<v Speaker 3>growth in private capital formation. You know, with respect to

0:13:39.600 --> 0:13:42.160
<v Speaker 3>private credit, we haven't had a credit cycle in quite

0:13:42.160 --> 0:13:45.120
<v Speaker 3>some time. If we have a real economic slow down

0:13:45.240 --> 0:13:47.600
<v Speaker 3>or ultimately a recession, you will have a credit cycle.

0:13:47.600 --> 0:13:48.600
<v Speaker 1>We have to manage through that.

0:13:49.280 --> 0:13:52.400
<v Speaker 3>But with a five to ten year view, I still

0:13:52.400 --> 0:13:57.080
<v Speaker 3>think growth in private capital formation is a long term

0:13:57.120 --> 0:13:59.679
<v Speaker 3>trend that's firmly in place, and a firm like Goldman

0:13:59.760 --> 0:14:02.080
<v Speaker 3>SAD and what we do in our asset wealth management

0:14:02.120 --> 0:14:04.000
<v Speaker 3>business is very well positioned to benefit for that.

0:14:04.640 --> 0:14:06.280
<v Speaker 2>We often talk about a canary in the coal mine,

0:14:06.320 --> 0:14:08.720
<v Speaker 2>or is there anything in either prior credit or anything

0:14:08.720 --> 0:14:11.520
<v Speaker 2>that you were watching out for an indication of a

0:14:11.559 --> 0:14:15.000
<v Speaker 2>significant souring. I guess of the economy or what.

0:14:16.720 --> 0:14:20.840
<v Speaker 3>Has happened that we're all watching is the level of

0:14:20.960 --> 0:14:27.000
<v Speaker 3>uncertainty has changed the prospects for growth in the short term,

0:14:27.640 --> 0:14:31.960
<v Speaker 3>and as a result of that, companies slow down capital plans,

0:14:32.880 --> 0:14:35.360
<v Speaker 3>people because they have less confidence spend less.

0:14:36.000 --> 0:14:38.000
<v Speaker 1>You know, I think there was evidence.

0:14:37.600 --> 0:14:40.560
<v Speaker 3>In late January early February that when you looked at

0:14:40.560 --> 0:14:43.320
<v Speaker 3>certain consumer discretionary businesses, we were starting to see a

0:14:43.360 --> 0:14:45.720
<v Speaker 3>little bit of slow down. Obviously with the level of

0:14:45.760 --> 0:14:50.000
<v Speaker 3>uncertainty we have. Now that's been accelerated, and so you know,

0:14:50.120 --> 0:14:52.720
<v Speaker 3>there's no canary in the coal mine. The prospects for

0:14:52.760 --> 0:14:55.720
<v Speaker 3>growth are slower and as a result of that, investment

0:14:55.800 --> 0:14:56.960
<v Speaker 3>will be slower.

0:14:57.480 --> 0:14:58.640
<v Speaker 1>And until there's.

0:14:58.440 --> 0:15:01.520
<v Speaker 3>More confidence in the policy p forward, we're going to

0:15:01.600 --> 0:15:03.360
<v Speaker 3>have to manage through a slower growth environment.

0:15:03.440 --> 0:15:06.560
<v Speaker 2>And so M and A and IPOs we'll take a backseat.

0:15:08.160 --> 0:15:11.120
<v Speaker 1>Too strong a statement again, Are you.

0:15:11.080 --> 0:15:12.320
<v Speaker 2>Telling me I'm too punchy as a.

0:15:12.360 --> 0:15:14.360
<v Speaker 1>Journalist, Well, I mean it's your job to be punchy.

0:15:14.400 --> 0:15:16.520
<v Speaker 3>It's my job to try to listen and try to,

0:15:16.600 --> 0:15:19.520
<v Speaker 3>you know, try to find some balance. Capital markets activity

0:15:19.600 --> 0:15:22.040
<v Speaker 3>was up year over year in the first quarter. M

0:15:22.040 --> 0:15:24.680
<v Speaker 3>and A activity for deals above five hundred million.

0:15:24.400 --> 0:15:25.640
<v Speaker 1>So the kind of m and AU and I.

0:15:25.640 --> 0:15:28.920
<v Speaker 3>Talk about was up in the first quarter year over year.

0:15:29.160 --> 0:15:31.240
<v Speaker 3>Sponsor m and A was up in the first quarter

0:15:31.320 --> 0:15:33.840
<v Speaker 3>year over year. I think it depends on where we

0:15:33.880 --> 0:15:35.680
<v Speaker 3>go from here. You know, if you look at the

0:15:35.720 --> 0:15:37.720
<v Speaker 3>month of April, there's still been a reasonable amount of

0:15:37.800 --> 0:15:42.600
<v Speaker 3>MNA activity. IPO activity is slower given the level of uncertainty.

0:15:43.080 --> 0:15:45.160
<v Speaker 3>If the level of it certainly grows from here, yes,

0:15:45.320 --> 0:15:48.560
<v Speaker 3>you won't see the same amount of capital markets activity.

0:15:48.640 --> 0:15:51.680
<v Speaker 3>But my own belief is things will settle down. We'll

0:15:51.720 --> 0:15:55.560
<v Speaker 3>have a clearer policy perspective and some normalization of capital

0:15:55.640 --> 0:15:58.800
<v Speaker 3>markets as we shift into twenty five and twenty six.

0:15:59.240 --> 0:16:02.960
<v Speaker 3>Even if we have a slower economy or even far

0:16:03.000 --> 0:16:06.400
<v Speaker 3>worse we have a recession, Ultimately, when the market adjusts

0:16:06.440 --> 0:16:07.320
<v Speaker 3>to that and resets.

0:16:07.400 --> 0:16:08.160
<v Speaker 1>People need to.

0:16:08.120 --> 0:16:11.160
<v Speaker 3>Transact, they need to raise capital, they need liquidity for

0:16:11.160 --> 0:16:13.560
<v Speaker 3>their investments, and so part of this is just a

0:16:13.560 --> 0:16:16.320
<v Speaker 3>reset of expectations, and we're in the process.

0:16:15.920 --> 0:16:16.520
<v Speaker 1>Of that happening.

0:16:16.640 --> 0:16:18.640
<v Speaker 2>I mean, given all of this, where do you see

0:16:18.720 --> 0:16:23.400
<v Speaker 2>hiring and firing and what divisions and where geographically.

0:16:22.800 --> 0:16:28.720
<v Speaker 3>At Golden's Well, I think this firm always manages its

0:16:28.760 --> 0:16:32.640
<v Speaker 3>headcount with a long term perspective, and we will continue

0:16:32.680 --> 0:16:37.280
<v Speaker 3>to do that. I think that in an environment like this,

0:16:37.320 --> 0:16:40.920
<v Speaker 3>where there's more uncertainty, we probably control our headcount by

0:16:40.960 --> 0:16:43.960
<v Speaker 3>doing less hiring, not by at the moment based on

0:16:44.000 --> 0:16:48.080
<v Speaker 3>what I see doing more firing. But I do think

0:16:48.120 --> 0:16:50.800
<v Speaker 3>one of the things that the labor force broadly will

0:16:50.840 --> 0:16:53.160
<v Speaker 3>have to deal with when there's uncertainty with companies.

0:16:53.160 --> 0:16:55.440
<v Speaker 1>And I'm hearing this from CEOs more.

0:16:55.280 --> 0:16:59.280
<v Speaker 3>Broadly, CEOs titaner belts, and when CEO's titaner belts, they

0:16:59.280 --> 0:17:01.280
<v Speaker 3>get focused on expenses. And so I think we're going

0:17:01.320 --> 0:17:03.040
<v Speaker 3>to go through a period here in twenty twenty five

0:17:03.440 --> 0:17:06.680
<v Speaker 3>where expense management is going to be more on focus

0:17:06.720 --> 0:17:11.240
<v Speaker 3>for CEOs running big businesses than capital investment. And if

0:17:11.240 --> 0:17:14.720
<v Speaker 3>we get more certainty as companies head into their planning processes.

0:17:14.720 --> 0:17:17.280
<v Speaker 3>In the summer that might change, But if we have

0:17:17.359 --> 0:17:20.240
<v Speaker 3>the level of uncertainty we have now, that probably won't change.

0:17:20.240 --> 0:17:21.360
<v Speaker 1>In twenty twenty five.

0:17:21.560 --> 0:17:23.480
<v Speaker 2>David, thanks so much for joining us. That was David

0:17:23.480 --> 0:17:26.359
<v Speaker 2>Solomon's executive officer there of Golden Sachs