Goldman Sachs CEO warns inflation may prove 'stickier' than expected

foxbusiness.com:

Treasury Secretary Janet Yellen discusses inflation risks, taxes and credit card debt in an exclusive interview with FOX Business.

Goldman Sachs CEO David Solomon warned Friday that inflation may prove more difficult to conquer than previously expected after back-to-back reports showed that price pressures within the U.S. economy rebounded at the start of the year.

In his annual letter to shareholders, Solomon said he is optimistic about this year as his firm stands to benefit from a rebound in capital-markets activity, even though prices could remain abnormally high for some time.

«After years of easy monetary policy and fiscal stimulus, economic conditions tightened at the fastest rate in 40 years, and yet there was not a recession,» he wrote. «The U.S. economy has proven more resilient than expected, and markets are predicting rate cuts, though I think inflation may prove stickier than many anticipate.»

JANET YELLEN WARNS INFLATION DECLINE MIGHT NOT BE 'SMOOTH'

David Solomon, chief executive officer of Goldman Sachs Group Inc., during a Bloomberg Television at the Goldman Sachs Financial Services Conference in New York on Tuesday, Dec. 6, 2022. (Michael Nagle/Bloomberg via Getty Images / Getty Images)

Prices for everything including groceries, new cars and health insurance surged in 2021 and 2022 as the result of rampant inflation, which was caused by COVID-19 pandemic-induced disruptions in the global supply chain, an extremely tight labor market and increased consumer demand fueled in part by stimulus cash. 

While inflation has fallen considerably from a peak of 9.1% notched during June 2022, it remains above the Federal Reserve's 2% goal. And when compared with January 2021, shortly before the inflation crisis