Market Pulse June
In 2025, the “soft” survey data have deteriorated sharply while “hard” activity data have remained relatively resilient. The question remains if activity will catch down to surveys or if sentiment will recalibrate. In our view, as trade policy becomes more constructive, the drag on disposable income and financial conditions could be smaller than expected. GIR has revised the 2025 full-year GDP growth forecast accordingly, up to 1.5%.
Price data have mirrored the hard-soft data split, with recent prints easing while inflation expectations have risen to new highs on tariff concerns. A now less-than-expected rise in the effective tariff rate (+13pp) and reduced incentive to shift supply chains from China should moderate price pressures. GIR expects core PCE inflation to peak at 3.6% by the end of 2025.
Congress is working on a reconciliation bill that extends expiring tax cuts, enacts new tax cuts, and reduces spending. In our view an early August enactment is most likely, but the sequencing will be important. We estimate the positive growth effects of the fiscal package would be smaller and later than the drag from tariffs, while tariff revenue would cover the increase in the deficit.
Source: Goldman Sachs Global investment Research. As of May 21, 2025. Chart shows an aggregate of soft data (e.g. consumer sentiment, business optimism) and hard data (e.g. ISM manufacturing, employment, retail sales) relative to March 4.
Source: Goldman Sachs Asset Management, GIR, and MSCI. As of May 30, 2025. “We/Our” refers to Goldman Sachs Asset Management. The macro and market views expressed may differ from those of GIR and other divisions of Goldman Sachs and its affiliates. See the end of material for additional disclosures. The economic and market forecasts presented herein are for informational purposes as of the date of this document. There can be no assurance that the forecasts will be achieved. Past performance does not predict future returns and does not guarantee future results, which may vary.
Global equity markets have rallied as US trade policy has turned from making disruption to making deals. Tariff rates are now lower, but not low, and the same can be said about US recession risk. However, moving past peak trade tensions means that even if hard data “catch down” to the surveys, markets are likely to show a greater willingness to look through near-term economic weakness
The US has historically balanced its current account deficit by exporting financial assets. Today, roughly 1/3 of the Treasury market is held by foreign investors. The role of Treasuries in that balance going forward will depend on their hedging value, US fiscal sustainability, and the safe-haven landscape, all of which point towards higher risk premia and steeper curves. Elsewhere, the rise in long-end JGB yields shows the challenge for global investors to absorb elevated issuance as central banks scale back purchases.
We expect central bank buying and safe-haven demand will continue to support gold prices, structurally resetting the gold-silver ratio beyond where silver can catch up.
Asset Class Forecasts: Price targets of major asset classes are provided by Goldman Sachs Global Investment Research. Source: “Global markets up last week, US leading.” As of June 2, 2025
“We/Our” refers to Goldman Sachs Asset Management. The economic and market forecasts presented herein are for informational purposes as of the date of this publication. There is no guarantee that objectives will be met. There can be no assurance that forecasts will be achieved. Diversification does not protect an investor from market risk and does not ensure a profit. Goldman Sachs does not provide accounting, tax or legal advice. Please see additional disclosures at the end of this page. Past performance does not predict future returns and does not guarantee future results, which may vary.
Private Market Pulse Check
After a volatile start to 2025 in public markets, investors are increasingly curious about how private markets are faring. Heightened policy uncertainty and market volatility has challenged equity dealmaking year-to-date, creating growing demand for liquidity solutions in secondary and credit markets, though we expect activity to pick up in the second half of the year. In this more complex operating environment, we think selectivity will be key as dispersion in fundamentals may drive divergence in investment outcomes.
Source: PitchBook, World Bank, and Goldman Sachs Asset Management. As of December 31, 2023. The chart shows the number of privately owned companies backed by private equity (excluding venture capital) versus domestic firms publicly listed on NYSE and Nasdaq.
“We/Our” refers to Goldman Sachs Asset Management. The economic and market forecasts presented herein are for informational purposes as of the date of this document. There is no guarantee that objectives will be met. There can be no assurance that forecasts will be achieved. Diversification does not protect an investor from market risk and does not ensure a profit. Please see additional disclosures at the end of this document. Past performance does not predict future returns and does not guarantee future results, which may vary.
The influx of private capital in recent years has allowed businesses to scale outside of public markets. Companies are staying private longer and partners are holding companies for longer. Amid a soft M&A and IPO market YTD, more businesses are needing private capital relative to the available supply. We believe this dynamic will be favorable for investors, both those evaluating opportunities where quality assets are repricing at discounts relative to prior rounds, as well as those identifying opportunities in secondary markets.
Source: PitchBook, NY Fed, and Goldman Sachs Asset Management. As of December 31, 2024. The chart shows the all-in yields for direct lending based on the higher of the Secured Overnight Financing Rate (SOFR) rate or 1% floor and the historical average direct lending spreads.
“We/Our” refers to Goldman Sachs Asset Management. The economic and market forecasts presented herein are for informational purposes as of the date of this document. There is no guarantee that objectives will be met. There can be no assurance that forecasts will be achieved. Diversification does not protect an investor from market risk and does not ensure a profit. Please see additional disclosures at the end of this document. Past performance does not predict future returns and does not guarantee future results, which may vary.
The rise of private credit was largely catalyzed during the market dislocations of 2020 and subsequent disruptions from rapidly rising rates, when the benefits of certainty of execution were apparent. Those features have again been on display in 2025 as M&A and issuance activity has been limited. Recent surveys suggest that spreads are likely to widen this year as borrowers have shown a willingness to pay higher prices to mitigate syndication risk. Still, company fundamentals will be critical.
Source: MSCI and Goldman Sachs Asset Management. As of March 31, 2025. The chart shows the year over year change in quarterly commercial real estate transaction volume in both the US and globally.
“We/Our” refers to Goldman Sachs Asset Management. The economic and market forecasts presented herein are for informational purposes as of the date of this document. There is no guarantee that objectives will be met. There can be no assurance that forecasts will be achieved. Diversification does not protect an investor from market risk and does not ensure a profit. Please see additional disclosures at the end of this document. Past performance does not predict future returns and does not guarantee future results, which may vary.
We expect the demand for commercial real estate financing to remain strong as a result of improving transaction volume and the roughly $3 trillion of loans projected to mature over the next five years in the US. Quality will remain key with newer assets in growing sectors and markets expected to outperform. At the same time, global infrastructure needs remain high. We are focused on thematic opportunities such as data centers, defense, and logistics as disruption shifts investment.
