Constellation Research CEO R Ray Wang and Heritage Foundation Public Finance Economist EJ Antoni participated in a discussion on ‘Mornings with Maria’ to share their perspectives on the outlook for 2025.
Goldman Sachs CEO David Solomon expressed on Tuesday that he believes financial markets will eventually stabilize despite current uncertainties. This stabilization is expected to lead to a rise in mergers among companies going through public listings.
In an interview with Bloomberg Television’s Francine Lacqua, Solomon stated that while an increase in uncertainty could suppress capital activity, he is optimistic that conditions will improve. He emphasized the necessity for transactions, capital raising, and investment liquidity, describing the current situation as a simple reset of expectations.
Solomon also warned of potential layoffs in the labor market as companies prepare for possible downturns and seek to manage costs effectively. He highlighted significant policy uncertainty, primarily related to President Donald Trump’s tariffs, which he said is negatively impacting economic growth and investment.
According to Solomon, policy actions have elevated uncertainty to an unhealthy level, discouraging CEOs and clients from investing and prompting them to tighten budgets.
Following Trump’s re-election, markets anticipated an increase in mergers and acquisitions, as well as initial public offerings, due to the change in administration. This sentiment contrasts with the Biden administration’s scrutiny of proposed mergers, which led to legal challenges over competition concerns.
Solomon remarked that the first quarter of 2025 experienced increased capital market activity compared to the previous year. He sees potential for more deals if the current uncertainty does not keep potential deal-makers inactive.
He concluded by saying that if uncertainty increases further, capital market activity might decrease, but he expects markets to settle, leading to a clearer policy perspective and normalization of capital markets.
