Source: Global Market Report

Goldman Sachs President John Waldron urged the Federal Reserve to ensure that it does not divert attention from curbing inflation.

“If you're the Federal Reserve, you have to slay the inflation dragon,” Goldman Sachs No. 2 Waldron said at an industry conference on Thursday. He said the worst thing the Federal Reserve can do is declare victory before the high price spiral plaguing the economy is contained.

The Goldman Sachs banker recalled a dangerous time in the 70s, when stubborn inflation forced the Federal Reserve under Paul Volcker to raise interest rates by several percentage points at once to stabilize the economy. Waldron said that although there are some signs that its policy tools have been successful, the central bank cannot consider its task complete, as entrenched high prices have a huge impact and remain Goldman Sachs's biggest issue in conversations with customers.

“Inflation has clearly slowed but is still stubborn,” he said. “We all agree that inflation is still in the system.”

The chief deputy to Goldman Sachs CEO David Solomon has described the market environment as complex and one of the most challenging environments he has experienced in the past. Now he says the economy seems to be turning around.

“It became more gentle and quite constructive,” Waldron said. “A soft landing is still the benchmark scenario, and it is still the most likely scenario.”

Editor/jayden