Goldman Sachs sees the potential for more investor gains as a set of powerful macro tailwinds lines up behind US financial markets.
In an interview with Chris Hussey, Kunal Shah, co-CEO of Goldman Sachs International and global co-head of the firm’s Fixed Income, Currency, and Commodities business, says the macro backdrop looks bullish for US equities.
Shah says multiple forces are converging at once, reinforcing investor optimism and extending the market’s run rather than capping it.
“And I think there are quite a lot of tailwinds there at play. On one hand, you just got easy financial conditions. You’ve got the Fed cuts that were delivered and just the knock-on impact of that. You’ve got the AI story, a lot of credit creation in CapEx, which is just fueling that cycle in the US. And this is also coming at a time when you’re getting the tariff drag fading.
Fiscal impulse is strong, and you’re going to see that continue with tax refunds. And then there’s deregulation, which we ourselves see in our own banking industry. But it just throws some fuel on that fire, which I think is what is bringing continued positivity when it comes to the US.”
He says the backdrop is shaping Goldman’s positioning for the year, with the firm maintaining a structurally bullish stance rather than treating the rally as tactical or short-lived.
“But structurally, when we look across the course of this year, we’re still going to be trading from the long side.”
Shah says the optimism is not just narrative-driven, but supported by hard technical factors, particularly the pace of liquidity expansion relative to economic growth.
“I think it’s also just backed up by technicals, just a sheer amount of liquidity and money supply growth in the US, which is outpacing even normal GDP. I think just means financial assets we think are just going to have some good tailwinds behind them.”
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