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LifestyleTranscript
00:00What's the global economy look like from your lens right now?
00:03I think it's, I think the economic.
00:05I think the economic setup is pretty constructive, especially in the U.S., but broadly, I think
00:09it's relatively.
00:10You've got a confluence of lots of stimulative fiscal.
00:15Policy and developed economies.
00:17You have a general deregulatory.
00:20Trend and tone, you know, both in the U.S. and Europe, particularly in the U.S.
00:25after a very, very difficult regulatory environment under the Biden administration.
00:29I think Trump.
00:30The Trump administration is moving quickly to rebalance regulatory burden, and I think
00:34there's a desire.
00:35In Europe to also improve, you know, the regulatory situation, that's quite.
00:40Stimulative, massive AI investment, infrastructure investment around the world, which is also
00:44quite.
00:45Stimulative, we've been in a monetary easing cycle, which also creates tailwinds.
00:50And we have midterm elections coming up in the U.S., where you certainly could see, you
00:54know, specific.
00:55Specific policy actions, particularly around, you know, affordability that also could be.
01:00Stimulative in some way.
01:01So, you know, economically, things set up nicely, but.
01:05Well, I wouldn't say but.
01:07A little bit the same as last year.
01:09There's a lot.
01:10There's a lot going on geopolitically.
01:11There's a lot going on in the world, and as that's.
01:15Stuff plays out, it can lead to speed bumps or.
01:20You know, distractions, you know, we saw one in April with the rollout of the trade policy.
01:23Right.
01:24That kind of slowed the.
01:25Economic momentum down.
01:26We then saw a pivot.
01:27We got through that.
01:29Obviously, there's a lot.
01:30A lot of noise at the moment when you talk geopolitics, you talk kind of global economic order.
01:35And people invest, people move forward when they're confident.
01:40The noise sometimes can sap confidence.
01:43Yeah.
01:43I think at the moment, generally, things look.
01:45Relatively green, but that doesn't mean there aren't issues that could pop up.
01:48Well, you just came back from.
01:50And the ruptures, the cross-Atlantic relationship seems to be frayed.
01:55The edges, if not at the core, how does that disrupt what's been a long time?
02:00What's been a long time alliance between the EU and the United States?
02:04Well, I.
02:05I think the word frayed is a much better word than ruptures.
02:08I don't think there are ruptures.
02:10I altered my words.
02:11Yeah, I think there's a lot of noise.
02:15And that noise frays trust.
02:17You know, trust is built.
02:20Over time, trust in important, you know, relationships around the world between nations.
02:25Is really built through sacrifice over time.
02:28And, you know, when there.
02:30There's, you know, when there's noise, it can fray those relationships.
02:34I think the fundamental.
02:35The fundamental relationships are still strong.
02:37But I certainly, in Davos' sense, still level for.
02:40I think there's a lot of frustration around some of the policy debate.
02:43But I, you know, I.
02:45I think that stuff will get passed.
02:47One of the things that I'm spending a lot of time doing is thinking about.
02:50What's noise and what's the substantive issue.
02:53And, you know, I.
02:55You know, I do think we're set in a place where we actually can make progress on a bunch.
03:00So, the substantive issues.
03:01But we certainly have, you know, an administration in the U.S.
03:05that shaken things up and that sometimes leads to, you know, to frame or concern on a bunch.
03:10How's your relationship with the White House right now?
03:12Our relationship with the administration.
03:15You know, is very, very good.
03:17You know, one of the things that I've said publicly that.
03:20I really appreciate this administration is open for business and it's engaged with business.
03:25You know, in the past administration, we had trouble engaging the administration.
03:28This administration.
03:30It takes your calls.
03:31We'll listen to your point of view.
03:32They may not agree with everything.
03:34We push back.
03:35You know, privately and tell them we don't agree.
03:37But they are open for business and engaged in a very constructive.
03:40And I think that's the way the system is supposed to work.
03:42Not to dwell on it, but I'll just ask one more question on that.
03:45It's like, I mean, is it conducive to having, you know, good policy and relationships?
03:50When he's suing JP Morgan for, you know, allegations of.
03:55De-banking, he's sort of sidelined Brian Moynihan at Bank of America.
04:00He called you out in August for some things, saying you should go back to DJing and the like.
04:05I like DJing.
04:06You like DJing.
04:07I know he was hard on Jan Hatsias, your chief economist.
04:10For his take on tariffs back in August.
04:13But Jan, in his research, is also.
04:15He's sort of changed his tune to saying the pass-through on tariffs into the economy is pretty much already.
04:20Has it taken a lot to regain the trust of the White House?
04:25I don't look at it that way.
04:28I think the.
04:30I think we have a relationship with the administration.
04:33It's a good relationship.
04:35We like some of the things they're doing.
04:37When we don't like them, we voice our opinion.
04:40They like things that we do.
04:41When they don't like them, they voice their opinion.
04:44Sometimes I wish.
04:45It wasn't in the media and the noise.
04:46But that just goes with the territory.
04:48We're focused on how do we.
04:50How does the economy grow?
04:51How do we contribute to helping the economy grow to support?
04:55Supporting our clients who are investing in America, investing in the global economy and trying to grow.
04:59And I would say this.
05:00This administration is incredibly constructive on that on that stuff.
05:03And again, ignore the.
05:05Focus on the noise.
05:05Focus on the substance.
05:06We're focused on the substance.
05:07And you were just reiterating a bunch of noise.
05:10Well, OK, let's talk about some of the numbers that you had, because in the fourth quarter, blowing.
05:15Past expectations in equity trading revenue.
05:17What's the market look like with a number of big tickets?
05:20The IPOs coming, whether it's SpaceX or others.
05:23What's the what's your outlook?
05:24The environment.
05:25The environment is the environment is very constructive, you know, for our business, particularly our banking and markets business.
05:30You know, we highlighted in our fourth quarter earnings, our year end earnings, that our backlog was.
05:35Again, at another, you know, significantly high level and it moved quite possibly.
05:40I think it's going to be a very constructive year for M&A activity.
05:43Could be one of the best years, if not.
05:45The best year ever for M&A activity.
05:47I think CEOs feel unleashed.
05:50To really invest, drive growth in their businesses, to better regulatory environment.
05:55They're asking big questions about what the art of the possible is.
05:58That's very different from where we were four years ago.
06:00Where the answer to any question was no.
06:02Now the answer to any question is yes, maybe.
06:05So CEOs are looking forward.
06:06That's a very, very constructive environment for our business.
06:08So we expect a...
06:10Strong M&A year globally, we expect a strong capital markets here globally.
06:15And we think the firm's very, very well positioned to capitalize on that.
06:17Two Fed cuts you're expecting?
06:19And what about...
06:20Are you worried about Fed independents?
06:21Are you worried about that?
06:22You heard Jan's position.
06:25I think a lot of that will depend, you know, on the trajectory of the economy.
06:29You know, I think...
06:30We could see upside to both nominal and real growth this year.
06:33That would have an impact.
06:35On whether or not the trajectory of monetary policy cuts continued.
06:4020% chance of recession, he said.
06:42Down from 30%.
06:43Do you see any...
06:45You know, I'll let Jan be the speculator, but at 20%, you know, the base...
06:50Case for recession is one out of seven, okay, which is a little bit lower than 20%.
06:54I think the chance of...
06:55The recession this year is low in the U.S., and I don't think you'd see one...
07:00Unless there was some exogenous event that materially changed the current sentiment.
07:05And I don't think that's, you know, I don't think that's a likely, you know, a likely outcome.
07:10So it's a pretty constructive environment.
07:12Are you seeing a necessary broadening out of the markets?
07:15It's beyond MAG7, and there's also the risk, of course, of a potential bubble.
07:20Well, you've seen a big move in markets away from MAG7.
07:22I think there's been broader participation.
07:25I think companies are investing.
07:26I think there's a big view that AI productivity is going to move into the...
07:30enterprise, and that creates flexibility for a broader array of companies to invest.
07:34And so I think...
07:35I think there's a broader level of participation, and things are set up quite constructively for the next few years.
07:39This AI...
07:40This AI productivity gain in enterprise is a real thing.
07:43It's going to take a while.
07:45For that to be implemented, but we're quite constructive on that, the tailwinds that that creates for economic growth.
07:50Well, that's a good pivot to Hong Kong, because the stock market here, regaining the IPO...
07:55...the crown last year, and essentially on the back of all these IPOs in the tech sector.
07:59A lot of...
08:00One of them, really, the big gainers have been the infrastructure and the not necessarily...
08:05the applications or the large language models, they've been essentially the hardware players, the chips and the like.
08:10Do you see a sustainability of this pipeline from China of...
08:15AI?
08:15If the environment continues to be...
08:20constructive the way it is now, yes, I think it'll be a very good year for IPOs over here too.
08:25I think there's a lot of pent-up capital markets activity because we really...
08:30coming out of the pandemic, we kind of shut down capital markets for a period of time.
08:34We got a more...
08:35conducive regulatory environment, you've got a good detente in US-China with...
08:40constructive setup in 2024 for more constructive dialogue.
08:44I think all that...
08:45that's conducive for more IPO activity here in Hong Kong.
08:47I think you're going to see more IOP activity in the US.
08:50in Europe, so it's a pretty constructive setup.
08:53Now, of course, if there was a big exogenous...
08:55event, you can slow it down, but I just...
08:57I don't think that's the base case, but that doesn't mean...
09:00we won't have some speed bumps along the way this year.
09:02We did in the last week get news of maybe Beijing tightening...
09:05some of the listing requirements for companies here in Hong Kong.
09:09There had been a flood...
09:10a rush to the market, obviously.
09:12Maybe there's some discrepancies on...
09:15whether it's CICC or some of the Chinese banks...
09:18and some of their underwriting capabilities...
09:20how much of an opportunity would this be as well...
09:23as the Chinese banks have really upped their game.
09:25in the underwriting and investment banking game here...
09:28with listings.
09:29I think it's very, very...
09:30important to have a vibrant, long-term successful capital...
09:35market listing venue here...
09:37that you ensure the highest level of standards.
09:40and so, you know, mistakes in underwriting prospectuses...
09:42not acceptable...
09:43you know, the standards should be...
09:45high.
09:46I think it's good that the regulators are calling that out...
09:48and asking for a standard of excellence.
09:50we're used to operating at that level of standard...
09:52all over the world.
09:53I think there'd be few people...
09:55that dispute Goldman Sachs' position...
09:57as the leading...
09:59one of the leading...
10:00equity underwriter in the world...
10:02over the last 25 years...
10:03and we expect to participate...
10:05very actively in any market...
10:07you know, that's vibrant...
10:08there's always competition...
10:09but I...
10:10what I like...
10:11when people are advocating...
10:12for the highest standards...
10:13that builds confidence in IPO markets...
10:15and I think that's something...
10:16that's very important.
10:17I understand you're heading up to Beijing...
10:18tonight...
10:19I believe.
10:20What's your...
10:20what's your agenda...
10:21what's your top priority...
10:22for the China market...
10:23right now?
10:24Clarity from a regulator is what?
10:25My top priority...
10:25is to be there...
10:26to spend time with government officials...
10:28spend time with our clients there...
10:30you know...
10:31I move around the world...
10:32and everywhere I go...
10:33it's the same agenda...
10:34spending time with our clients...
10:35spending...
10:35spending time with...
10:36with important...
10:37you know...
10:38government partners...
10:39spending time with our people...
10:40and so...
10:41you know...
10:42I'm back up in Beijing...
10:43for the next couple of days...
10:44to do those three things...
10:45no different than...
10:45what I did last week...
10:46when I was in Davos...
10:47no different than...
10:48what I'm doing here in Hong Kong...
10:49no different than...
10:50what I'll do...
10:50when I'm back in Washington...
10:51later this week...
10:52you know...
10:53that's...
10:54that's kind of what we do...
10:55spend time...
10:55with our clients...
10:56spend time...
10:57and engage with...
10:58government leaders...
10:59spend time with our people...
11:00and make sure...
11:01we're doing everything...
11:02to ensure...
11:03constructive markets...
11:04strong...
11:05capital markets...
11:06strong M&A environment...
11:07and right now...
11:08I think we've got...
11:09a constructive environment...
11:10for all of that...
11:10what's your number one...
11:11priority for the China market...
11:12I mean...
11:13it's kind of a two-speed economy...
11:14obviously...
11:15export...
11:15driven...
11:16for now...
11:17domestic economies...
11:18troubled...
11:19a share market...
11:20really well though...
11:21our...
11:22our number one goal...
11:23for the China market...
11:24is the same...
11:25as it's always been...
11:25we've got a big base...
11:26of clients there...
11:27and we're trying to...
11:28position to help them...
11:29achieve their goals...
11:30whether it be...
11:31capital raising...
11:32advice...
11:33consolidation...
11:34strategy...
11:35our job...
11:36is to serve our clients...
11:37and that's always...
11:38our number one priority...
11:39you said...
11:40you're always...
11:40on a plane...
11:41you're heading...
11:42around the world...
11:43Qatar Investment Authority...
11:44you have a new...
11:45strengthened partnership...
11:45there...
11:46what...
11:47about $25 billion...
11:48what does that say...
11:49about the importance...
11:50of the...
11:50in the Middle East...
11:51when those...
11:52Chinese banks...
11:53I just mentioned...
11:54as well...
11:55they just tripled...
11:56their...
11:57number of loans...
11:58last year...
11:59and how...
12:00strategic would be...
12:01the place...
12:02where you invest...
12:03those funds...
12:04well...
12:05the...
12:06the...
12:07partnership...
12:08with the QIA...
12:09is a partnership...
12:11to...
12:12invest...
12:13all over the world...
12:14basically...
12:14based on our broad...
12:15global asset...
12:16management platform...
12:17we also have...
12:18partnerships...
12:19with...
12:19clients...
12:20in China...
12:21and partnerships...
12:22with...
12:23you know...
12:24clients...
12:25in Singapore...
12:26with...
12:27partnerships...
12:28with...
12:29clients...
12:30all over the world...
12:31are...
12:32investing expertise...
12:33and...
12:33in particular...
12:34our very...
12:35very unique...
12:36sourcing...
12:36capability...
12:36to ensure that they get exposure to the most important and interesting opportunities.
12:41That's what we do.
12:43That's kind of the strength of our asset management franchise.
12:46And so that's part of the growth in that business, which has been an important key.
12:51That's a big grower for Goldman Sachs.
12:52Let's keep going around the world.
12:53How about Japan?
12:54I mean, they had the recent bond market volatility.
12:56Obviously, there's some concern over the fiscally assertive.
13:02What's your view right now, given the bond market?
13:05There's no question.
13:06You know, given the setup over the last 30 years, there's bond market volatility in Japan.
13:11Japan needs a more outward-looking economy and more growth.
13:16You know, to really get to a different place than where it's been over the course of the
13:19last three decades.
13:20But we're actually quite excited.
13:21Because we see pensions and corporates in Japan, you know, looking more...
13:26Outward, we see a culture of risk-taking developing in Japan that really hasn't existed for the
13:30last three decades.
13:31And so we're optimistic that through our banking and markets business and our asset management business...
13:36There's more that we can do to help clients in Japan.
13:41So I'm actually headed to Japan next month.
13:43Okay.
13:44Now I'm again, and you know, I actually think...
13:46There's some very, very interesting opportunities to help our clients there and partner with
13:49our clients there.
13:50Probably.
13:51What are your hiring plans?
13:52Do you have a kind of a good map you can reveal to us where you think you need to...
13:56We're always looking for great talent all over the world.
14:01You know, I think the trajectory of talent growth for us in 2026 will be a little...
14:06bit slower.
14:07But, you know, certainly as you look out five years from now, the firms...
14:11It's always growing.
14:12It's always looking for talent.
14:13And the thing that really differentiates the firm is...
14:16Extraordinary people.
14:17So even with the technology tools and AI, our ability to attract developers...
14:21To help and retain extraordinary people as part of the secret sauce of Goldman Sachs,
14:24that doesn't change.
14:25I think Wall Street...
14:26Each had about 10,600 jobs in combined, the big banks, last year.
14:31Does 2026 look like that as well?
14:33I think that was the most since 2016.
14:35I don't have...
14:36I don't have a view on Wall Street overall and its headcount.
14:39You know, I understand our headcount plan.
14:41Yeah.
14:42And, you know, all we've said publicly is it's probably a little bit more constrained...
14:46In 2016 because we see opportunities for efficiency and we're trying to deploy those, but ultimately...
14:51We've also said those efficiency opportunities give us more of an opportunity to invest...
14:56In parts of our business where we can scale growth and some of that growth scales with additional headcounts...
15:01You know, I point to our wealth management business which scales with people all over the world.
15:05Well, listen...
15:06So we're excited...
15:06I'm excited about that.
15:07Let's end the interview on a moonshot of the prediction markets.
15:10You mentioned that obviously...
15:11In the call...
15:12Very interested.
15:13You're looking at this.
15:14You have teams looking at it.
15:15What does a...
15:16Foray into the prediction markets look like for Goldman Sachs?
15:19Well, I mean, Goldman Sachs to some degree is...
15:21In prediction markets because we operate derivative contracts.
15:23Yeah, right.
15:24And so...
15:25But really pegging it to real...
15:26In life events.
15:27That kind of thing.
15:28I think there are interesting things going on in the prediction markets.
15:31That would allow our clients the opportunity to think about and hedge risks.
15:36That are inherent in their positioning.
15:38And I think that's super interesting.
15:39So obviously Goldman Sachs given what...
15:41We do.
15:42Given our position of derivative markets would be anxious to understand that.
15:46We partner with some of those prediction markets or develop capabilities of our own.
15:50They give our clients...
15:51Access to that with depth and liquidity that doesn't yet exist in those markets.
15:55But if you...
15:56You can develop depth and liquidity in those markets.
16:00It allows...
16:01You know...
16:01Very interesting ways to hedge and think about positions that people take.
16:04Does a partnership or a merger...
16:06Transposition happen this year?
16:07Yeah.
16:08Nobody's talking about merging or buying these businesses.
16:10These are...
16:11Fully staged things.
16:12Yep.
16:13And I think they're very, very interesting for people that are...
16:16Interested in market risks and how you hedge different market exposures.
16:20But it's...
16:21It's an extension of stuff that's been going on in the regulated financial markets for
16:25a long time.
16:26And of course, that's going to interest Goldman Sachs and interest our clients.
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