Goldman Sachs CEO: ‘It will take two weeks to digest the Iran situation… markets unexpectedly calm’

David Solomon, CEO of Goldman Sachs, said it would take two to three weeks for financial markets to fully digest the Middle East-driven crisis.

According to Reuters on the 4th (local time), Solomon said in a speech at an event in Sydney, Australia, that “it will take two to three weeks for financial markets to fully digest the fallout from this situation.”

“I was honestly surprised by the market reaction,” Solomon said, adding that “given the seriousness of the situation, the market response was far more muted than expected.”

He continued, “It takes two to four weeks for markets to properly process the implications of what has happened in the short to medium term,” adding, “it is difficult to make a hasty forecast at this point.”

Earlier in the day, U.S. stocks in New York, which opened sharply lower, recouped losses as sentiment steadied following President Donald Trump’s remarks about “escorting ships through the Strait of Hormuz.”

In South Korea, however, both the KOSPI and KOSDAQ plunged more than 8%, triggering circuit breakers. The won-dollar exchange rate topped 1,480 won intraday.

Separately from the current Middle East crisis, Solomon said the underlying fundamentals of the U.S. economy remain quite solid.

He explained that a combination of an accommodative monetary policy stance and deregulation, among other factors, is supporting the U.S. economy’s robust growth momentum.

“Let’s set aside for a moment what’s happening in the Middle East,” Solomon said, adding that “there are powerful macro tailwinds blowing that will make the trajectory of U.S. economic growth highly compelling.”

Noh Jeong-dong, Hankyung.com reporter dong2@hankyung.com