You might call it entering the lion’s den – even if Lloyd Blankfein probably didn’t realize it at the time. The chief executive of Goldman Sachs on Wednesday took on the German banking establishment, telling a Handelsblatt-sponsored conference why he believes low interest rates aren’t really such a bad idea.
Mr. Blankfein isn’t necessarily one to pull punches when he feels it’s warranted. The US investment banker has been among Donald Trump’s more ardent critics, for example, and on Tuesday acknowledged the new US administration has proven “more chaotic” than expected, even if he’s still hopeful that some of Mr. Trump’s priorities, like financial deregulation, will work out well for his industry.
But when it comes to central banks, Mr. Blankfein played defense. While German bankers have long warned that historically low rates are undermining their business model, Mr. Blankfein urged the skeptics to be patient, and praised the work of Janet Yellen of the Federal Reserve in the US and Mario Draghi of the European Central Bank in Europe.
“My bias is, yes, we have to get back to normal. But the consequences of raising rates too quickly too early are more dramatic than the consequences of waiting,” he said in an interview held in New York.