Goldman CEO Says U.S. Needs To Get 'Debt Levels Under Control,' As He Flags Risk

Goldman Sachs CEO David Solomon cautioned Tuesday that mounting U.S. government debt requires immediate attention, pointing to a recent surge in Treasury yields as a signal of market concerns over federal borrowing.

Speaking at a National Retail Federation conference in New York, Solomon highlighted that the yield on 10-year Treasury notes reached 4.7%, mostly driven by expectations of continued government debt growth rather than inflation fears or Federal Reserve policy shifts.

“We’ve really grown the debt stack,” Solomon said at the conference. “I think it's super important that we really get our spending, our deficit and the debt levels under control.”

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The Goldman chief described the current U.S. economic landscape as “fragile,” even as he expressed optimism about certain policy directions. His comments come as financial markets grapple with recent economic data, including last week’s stronger-than-expected jobs report that triggered a fresh jump in bond yields.

Solomon pointed to a shift in market dynamics in government bond trading. “Real bond buyers are looking and saying, we’ve got a lot of financing coming forward as we go through the rest of the decade and that’s pushing long rates higher,” he said, noting it represents a departure from recent market patterns.

The banking executive’s debt warnings coincide with broader changes in business sentiment. According to the Chicago Fed Survey of Economic Conditions cited by the Financial Times, the business outlook has improved for the next 12 months. In December, the National Federation of Independent Business’s Small Business Optimism Index reached its highest level since October 2018.

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Solomon indicated that corporate leaders have delayed investments due to current regulatory policies. However, he said that any economic policy changes need to be carefully balanced between trade and immigration measures.

While acknowledging border security, Solomon stressed the need for continued immigration growth. “When you think about deportations, it’s very, very important that we balance all that with continued immigration growth and we’ve got to get that balance right,” he said.

The comments from Goldman’s chief executive reflect broader market concerns about U.S. fiscal sustainability. Recent months have seen selling pressure in government bond markets, with yields continuing to climb amid heavy Treasury issuance.

Goldman Sachs itself has shown strong financial performance despite market uncertainties. According to a report issued by CNBC, the bank reported fourth-quarter results that exceeded analyst expectations, with profits approximately doubling compared to the previous year.

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