Solomon’s comments on the term Treasury premium are the most market relevant detail here, framing the recent rise as a longer-term trend driven by fiscal spending, embedded inflation and stronger growth rather than a one-off dislocation, and explicitly saying a 5 percent premium is not a calamity by historical standards. That framing pushes back gently against narratives treating rising long-end yields as an alarm signal, and comes from someone whose firm sits at the centre of the debt-financed AI buildout he was also asked about. His view that large-cap AI-related credit issuance is backed by strong underlying cash flow, while acknowledging some future recalibration is likely, offers a measured counterpoint to more bearish credit-market commentary. On rates and currency intervention, Solomon treated recent Treasury and yen actions as signalling exercises rather than moves that alter underlying market trajectory, consistent with his broader message that markets are efficient enough to find their own levels regardless of official jawboning.
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Goldman’s Solomon says the US economy is in good shape and a higher term Treasury premium is a fiscal story, not a five-alarm fire.
Summary:
- Goldman Sachs CEO David Solomon told CNBC at the G20 finance leaders’ meeting in Asheville that his outlook for the US economy is “pretty constructive,” citing a resilient consumer, a large investment cycle, and extraordinary earnings growth.
- He flagged the situation in the Middle East and trade policy and tariffs as headwinds, without offering a specific view on oil prices.
- On the debt-fuelled AI investment buildout, Solomon said he does not see a lot of risk in the system currently, since much of the credit issuance comes from large companies with strong underlying cash flow, though he expects some recalibration eventually.
- Asked about recent Treasury and yen market interventions, Solomon called them signalling actions rather than moves that change underlying market trajectory, given how efficient large markets are at finding their own levels.
- He described the rise in the term Treasury premium as a longer-term trend reflective of fiscal spending policy, embedded inflation, and higher growth, saying a roughly 5 percent premium is not a calamity in historical context.
- Looking further out, Solomon said AI’s productivity gains could support a fundamentally higher growth rate over the next five to ten years, while acknowledging the path will not be a straight line and that some individual AI investments will fail.
Goldman Sachs Chairman and CEO David Solomon described his outlook for the US economy as “pretty constructive” in a CNBC interview conducted at the G20 finance leaders’ meeting in Asheville, North Carolina, pointing to a resilient consumer, a substantial investment cycle, and what he called extraordinary earnings growth as key supports.
Solomon said the economy is performing well overall, though not without friction, citing the situation in the Middle East and trade policy and tariffs as headwinds currently working against the otherwise constructive backdrop. He did not offer a specific view on oil prices or energy markets directly. Taking a longer view, Solomon said the integration of artificial intelligence into the economy and enterprise offers a genuine opportunity to lift the underlying growth rate over the next five to ten years, driven by productivity gains, while cautioning that the path will not be linear and that not every individual AI investment will pay off.
On the question of whether the debt-fuelled nature of the AI buildout poses a credit risk, Solomon said he does not currently see significant risk in the system, noting that much of the credit issuance behind the buildout is coming from very large companies with fundamentally strong underlying cash flow, which are choosing to redirect earnings from other parts of their business into the growth cycle. He acknowledged that some areas will likely go too far and that a recalibration is possible at some point, but said Goldman is watching the situation closely and is not overly concerned at present.
Turning to rates and currency policy, Solomon addressed recent Treasury and yen market interventions, noting he had reviewed Treasury Secretary Scott Bessent’s own comments on the subject beforehand. He characterised such actions as signals rather than moves that fundamentally alter market trajectory, pointing to Japan as an example where intervention communicates commitment without necessarily changing the underlying path of the currency, given how efficient the world’s largest markets are at settling at their own levels. On the broader rise in the term Treasury premium, Solomon attributed the move to a longer-term trend shaped by US fiscal spending policy, more embedded inflation in the economy, and higher growth, rather than to any single event. He added that a roughly 5 percent term premium is not a calamity when viewed against historical norms, and that such premiums have been higher in the past without triggering crisis conditions, a comment that offers a measured, data grounded counterweight to more alarmist readings of the recent move in long-end yields.
This article was written by Eamonn Sheridan at investinglive.com.