Goldman Sachs Chairman and CEO David Solomon said it may take “a couple of weeks” for financial markets to digest the economic implications of the war involving Iran, describing the early reaction as unexpectedly muted.
Speaking at the Australian Financial Review Business Summit in Sydney on Wednesday, Solomon said: “I’m actually surprised” the market response has been “benign” given the scale of events. He added: “It’s gonna take a couple of weeks for markets to really digest the implications.”
His point was not that risk has disappeared, but that repricing often lags when investors cannot yet map a direct hit to growth. In practice, that “digest” period is usually driven by second-order signals — energy flows, freight availability, and insurance pricing — rather than the initial headline shock.
Oil has been the most immediate pressure point. Reuters reported Brent crude was up more than 13% for the week in early trading on Wednesday, as investors weighed the chance of sustained disruption in the Gulf. Equity moves have been more uneven: Wall Street has pared early declines in recent sessions, even as parts of Asia have sold off sharply amid concerns that higher energy costs could delay interest-rate cuts.
The centre of gravity for those concerns is the Strait of Hormuz. The strait was closed for a fourth day on Tuesday, cutting through a route that accounts for about 20% of global oil and gas supply, and leaving dozens of ships stranded in the wider area.
Alongside this, reports indicate that insurers have been cancelling war-risk cover for vessels in the Gulf, with tankers damaged or stranded and more than 150 vessels dropping anchor in and around the strait as operators reassessed routes and safety protocols.
Solomon used the same Sydney appearance to argue that the US still has “strong macro tailwinds”, including an easing monetary cycle and looser regulation, and said there is “a reasonable probability” the economy runs “a little bit hot”, with inflation potentially “slightly higher” than consensus expectations. He also warned that competition to deploy capital can weaken lending standards late in a credit cycle, and said artificial intelligence will disrupt white-collar work in the short term, even as Goldman aims to redeploy staff into higher-value roles as productivity rises.
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