Some of Wall Street’s biggest bosses have not pressed the panic button on President Trump’s policies despite acknowledging new concerns from the business world.
Blackstone (BX) CEO Steve Schwartzman said earlier this week that US tariffs will produce more production “at the end of the day.”
“I think the business community understands what the president is trying to do with tariffs,” Goldman Sachs (GS) CEO David Solomon said Wednesday.
BlackRock (BLK) CEO Larry Fink said on Wednesday that he had heard from the CEO that “we’re weakening the economy as we speak,” but that he predicted “if we can unlock private capital… it will resume and rekindle the next wave of bull markets.”
2019 Blackstone Group CEO Steve Schwartzmann (Reuters/Gary HE) ・Reuters/Reuters
Wall Street certainly has a lot of Trump 2.0 rides. Earlier in the year, bankers were extremely optimistic that the Trump administration’s growth agenda and deregulation stance would unleash the animal spirit of the market and promote gusts of winds in our trade.
However, uncertainty surrounding the administration’s trade policy has shaken up markets and raises new concerns about the direction of the US economy and inflation.
It makes it even more difficult for bankers and executives to know how trade changes will affect supply chains or whether they should draw public lists or mergers triggers.
Earlier this week, Goldman Sachs (GS) became the first major Wall Street company to lower the year-end price target for the S&P 500 (^GSPC).
While it wasn’t as bullish as major banks initially expected, the new forecasts are still optimistic. That’s 11% higher than the February index’s best ever set.
Solomon said Wednesday in Fox Business Network’s Morning with Maria that he hopes to pick up in certain deals this year.
“The level of uncertainty is a bit high, and it maintains some possible deals on the sidelines, but the overall level of dialogue is certainly increasing as people are strategically thinking about where they want to drive their business.”
Goldman Sachs CEO David Solomon (Reuters/Brendan McDermid) in 2023 ・Reuters/Reuters
“It could unleash more animal spirits, especially if more concrete actions are obtained in terms of regulation,” he added.
Trump made an effort to speak directly with Solomon and some of the other top CEOs this week at a Business Roundtable meeting in Washington, D.C.
Read more: What Trump’s tariffs mean for the economy and your wallet
“There’s a new spirit,” the president told executives, adding, “Taxes will throw a lot of money on this country.”
While some of the meetings were closed to the press, Trump laid out other parts of his agenda. This extended corporate tax cuts, accelerated approvals for environmental projects, and brought more work and plants back to the US.
President Trump spoke at a Business Roundtable Quarterly Meeting held in Washington, D.C. on Tuesday. (Pool via AP) ・Associated Press
The next day, one attendee, Jamie Dimon, CEO of JPMorgan Chase (JPM), previously downplayed the impact it had on consumer sentiment.
“I don’t think the average American consumer who wakes up in the morning to work is like 175 million, but they’ve changed what they’re trying to do because they read about tariffs,” Dimon said in an interview with an event hosted by the Semer for Reporter in Washington, D.C., BlackRock and the Dipolar Policy Center.
“But,” he nodded with anxiety in the business world, adding, “I think companies do. Uncertainty is not a good thing.”
Since Trump took office, Dimon has praised, to some extent, the Trump administration’s efforts to reduce bureaucracy in Washington, D.C., and publicly denounced tariff concerns without a complete judgment as to whether cost-cutting efforts and trade policies have become too far away.
Jamie Dimon, CEO of JPMorgan Chase. (Tom Williams/CQ-Roll Call, Inc. ・Tom Williams via Getty Images
A few days after Trump’s second term, Dimon talks with CNBC on the tariffs, “If it’s a bit of inflation, but good for national security, get over it. I mean, get over it,” Switzerland’s World Economic Forum.
He gave a similar point in a speech at Stanford University on March 7, calling the current impact of tariffs “very modestly inflationary” and saying that the impact on that part of the economic situation was “unbalanced.”
However, he acknowledged a scenario where the impact could be greater. “Now, if you put a 25% tariff on all imports, that’s more. That could be a recession and inflation, in my view,” Dimon added.
Read more: What is a recession and how will it affect you?
Fink, who runs the world’s largest money manager, has already shown that his company’s moves coincided with the Trump administration’s priorities.
It was last week when the BlackRock-led coalition signed a $22.8 billion deal with Hong Kong-based CK Hutchison, which includes control of two ports at either end of the Panama Canal.
BlackRock chair and CEO Larry Fink in January. (Fabrice Coffrini/AFP via Getty Images) ・Fabrice Coffrini via Getty Images
The move gave Trump what he wanted on his first day in office. It is the larger American presence in the important transport lanes where he claimed Chinese interference.
According to the Bloomberg and the Wall Street Journal, Fink himself has cleared his contracts with Trump and other White House officials.
This week, Fink offered optimism amidst uncertainty. “The global economy will do well over a long cycle,” Fink said Monday at an event in Houston.
On Tuesday, he told CNN:
However, he added that Trump’s policies, including tariffs, could be “very productive for the United States” in the long run. Regarding market losses this week, he said “there is no problem with the market pullback.”
“I’m very bullish in America, so I consider it an opportunity to buy.”
David Hollerith is a senior reporter on Yahoo Finance, covering banking, crypto and other areas of finance.
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