Goldman Sachs president John Waldron said the Trump administration's early trade deal could trigger a binary response in financial markets and determine how investors view the White House tariffs.
Wall Street has experienced a turbulent month that has made investors inevitable between those who think the tariffs involve helping change the U.S. economy and those who fear recession.
"From everything that comes out of these trade negotiations, we hope it will be quite defined. It may be bullish, but it may be a template," Waldron said in an interview with the Financial Times.
Waldron's comments are widely regarded as CEO David Solomon's most likely successor, reflecting Wall Street's anxiety about the government's progress in finding trade deals with dozens of countries.
President Donald Trump is in the early stages of many of the 90-day comprehensive tariffs announced on April 2, allowing Washington and other global capitals to negotiate new trade agreements in time.
"The market is very concerned about these early trade deals," Waldron said.
He added: "The Bull case is that we don't have to debate trade after Labor Day, and we are in a situation where lower mutual tariffs are comprehensive and reduced non-trade barriers."
Waldron said he expects the market focus to shift from trade to “the fiscal situation and what a budget reconciliation looks like.”
Congress will negotiate a detailed budget within months of the recent agreement on the budget solution.
The performance of the first few months of the year is very different from Wall Street’s early expectations of the Trump administration. Many executives expect Trump to continue massive deregulation and tax cuts to boost the U.S. economy, with some Wall Street leaders talking in January about the “animal spirit” campaign to revitalize investment banking.
Instead, Trump's extensive tariffs have disrupted financial markets, which have taken precedence over most other policies. Although the bank's trading sector has gained huge gains from market volatility, uncertainty weakens trading.
Waldron said that after Trump announced a pause on most tariffs, financial markets "are more focused on growth forecasts, although more focused on growth forecasts." He said the company has been insisting on making any major changes to its operations until they can see the results in ongoing trade negotiations.
"Most people haven't changed because they're thinking, and within 90 days, you'll learn more."