Goldman Sachs’ second-in-command has expressed concerns about the potential economic fallout from the ongoing government shutdown, urging lawmakers to reach a resolution.
John Waldron, the firm’s chief operating officer, told the Post that the dispute over funding—which has halted many government operations since October 1—may impact the overall IPO market.
“I think the economy is in decent shape,” Waldron mentioned during a Wednesday interview.
Yet, he added, “the American system works better when the government is functioning.” He voiced apprehension about the escalating issues if the shutdown persists. “If this drags on, it could hinder growth and innovation. Capital formation isn’t happening.”
He also noted that prolonged inaction could lead to companies facing delays in their listings due to a lack of timely feedback from the SEC.
Goldman Sachs recently reported a strong third quarter, bolstered by solid trading success.
However, amid this good news, management has cautioned staff about potential layoffs, partly attributable to AI advancements altering the company’s operations.
Waldron is viewed as a likely successor to CEO David Solomon, who secured an $80 million retention package in January, set to fully vest in five years.
Waldron’s appeal for an end to the funding deadlock was mirrored by Treasury Secretary Scott Bessent, who remarked that the shutdown could cost the economy $15 billion daily.
Bessent emphasized that the economy is already “starting to suffer” from the shutdown and called on moderate Democrats to collaborate with Republicans for a consensus.
Comments from both Waldron and Bessent came shortly after the Senate failed again to advance a Republican bill for government funding, marking the ninth unsuccessful attempt.
This shutdown occurred earlier this month due to disagreements between Republican and Democratic lawmakers over a funding bill extending beyond October.
For the government to operate smoothly, all branches must agree on a spending plan.
The Treasury secretary referred to the funding lapse as a “(Chuck) Schumer shutdown,” accusing the Senate Minority Leader of failing to negotiate effectively.
As a result, many government services are on hold, and federal employees are either working without pay or on unpaid leave.
Experts caution that without a deal, the shutdown isn’t without consequences and could impose economic strain on regular Americans.
“If we continue into next week, we might be veering into uncharted territory,” Wells Fargo analysts mentioned in a note. They warned that this turmoil could disrupt government agencies’ capacity to gather essential economic data.
According to their assessments, every week of the shutdown could cut quarterly economic growth by 0.1 to 0.2 percentage points.
