Markets are really gripped by what's going on roughly 8000 miles away.

Right. The Middle East conflict is still front

and center. We don't know how extended it's going to

be. You said yesterday you were surprised by

how benign markets were. Your team of strategists led by Peter

Oppenheimer is saying by the do. Do you see complacency at the moment?

I don't see I don't see complacency. I just I think there's a lot of

uncertainty around the direction of the conflict, how it'll be resolved, you

know, what the off ramps are. And, you know, I think it's fair to say

when you look at markets, market reactions have been relatively benign.

And I certainly could have seen over the last couple of days, you know, a little

bit more volatility. But I don't think people are being

complacent. I think that market participants are

looking and trying to say, you know, how is this going to play out?

What's the end game? You can see, you know, good scenarios

and more difficult scenarios. And as they have more information in the

coming days, the coming week or two, you know, I think that will have an impact

on risk premiums. I think at the moment, what market

participants are really looking at is, is this going to translate through to

things that affect economic growth and activity, particularly energy supply

chains? You know, so far, I think one of the

reasons why markets are reacting the way they are is they're encouraged that

there is, you know, strong support for trying to ensure that doesn't happen.

But it's uncertain. You don't know.

And and we'll see in the long run for portfolio allocation.

And I know Peter Oppenheimer, I me most of our memory is a call for our wealth

clients. You know, if you have portfolio

allocation, there's nobody that's saying you should change your fundamental

portfolio allocation because of what's going on.

But for traders and day to day market participants to think about risk premia,

you know, every single day, obviously they're watching very closely.

What about the people that run big, major global banks like yours?

Right. Do you worry about the lack of

predictability when it comes to policy, when it comes to how this potentially

ends and when it ends? What's going on with Europe, at least

operations for ease? I, I, I worry about a lot of things.

We run a big global business. We have an extraordinary team.

And, you know, I think one of the things that we have to accept is the world is a

very complicated place. There's always a lot of uncertainty,

there's always a lot of nuance. But we have, you know, base beliefs and

how economies will perform, how the world will evolve.

And, you know, we operate around that, but we always are prepared to risk,

manage and think about downside risks. And I think one of the things you have

to do when you run a big, large financial institution is that when you

know facts change or risk come up, you've always got to be prepared to

pivot, to shift, to de-risk. And, you know, we want our business, you

know, that way always run a big balance sheet.

And we you know, we think about that every day.

But there's nothing while these are very, very significant events and I

don't want to diminish them in any stretch.

You know, we've operated the firm through lots of very significant events

year in, year out. And that's that's part of what we do as

a business is no more than for, say, your offices in Saudi Arabia is is to

travel going on with the communication with their clients.

That's that is complex. We have we've got a significant number

of people in, you know in those Middle East

countries. And obviously first and foremost, we're

concerned with their safety. And, you know, we're trying to do

everything we can to support them and their families.

I would not say, you know, it's business as usual in those markets.

You know, all those markets for all businesses, you know, our operating work

from home and and, you know, stay safe as a first priority.

And so we'll just have to watch closely, you know, how things play out.

And, you know, we're very, very focused on making sure our people and their

families are safe and sound. And at the moment, that's our primary

focus in that part of the world. Do you think there is a bit of an

existential cloud over Dubai's a financial center now?

Well, you know, I do think safety and security matters and I wouldn't say I

think it's a little bit premature to talk about existential clouds.

But, you know, if you're living and operating in a place and you didn't

anticipate this, it's quite scary and it's quite unsettling.

And so, as I said, our primary focus is on the safety and security of our

people. Therefore, we're working very hard to

make sure that we're protecting them in their families.

It's also in the background prior to this conflict was was crystal clear.

Right. We just came off really trying to work

out what the air statewide was going to be like.

Do do we think that when it comes to that narrative of sustainability or do

you know? I know Jamie Dimon said there's some

players doing dumb things, for example. Is that does that still have further to

go? I'm not sure I understood the question

exactly. Are you talking about kind of I

investment? You know, growth?

Look, AEI is a fabulous, fabulous, incredible technology that is going to

drive massive productivity gains through society.

There's a lot of capital being deployed to grow AI capabilities around the

world. Some of that capital is going to get

reasonable returns. Some of that capital is not they're

going to be winners. They're going to be losers.

As with in any technology supercycle. I think we're early in that process, but

I think it's exciting. And I actually look at the glass being

half full. That doesn't mean that there won't be,

you know, capital that's burned companies that don't work out.

But I think overall, the benefits to enterprise productivity, you know, the

economy broadly as this tech. oLogy gets developed and deployed is

going to be quite excited. And I'm looking at the optimism of, you

know, what's ahead from all this and of course, trying to manage the risk of the

downside, the speed bumps that will inevitably come along the way.

I like the earlier said, you know, in your job, you worry about a lot of

things, Right. Trade tariffs, U.S.

policy is obviously one of them. And I think this is the first time we've

spoken to you since the Supreme Court passed down their judgment.

Does the further lack of predictability on trade policy, is that also a concern

when it comes to business sentiment, when it comes to your views on how the

U.S. economy is going to go?

You know, I think uncertainty does affect business sentiment broadly.

But I just say I don't think that I don't think that at the moment, U.S.

trade policy is that uncertain. I you know, I think this administration

has been clear about how they intend to drive a trade policy.

I think the Supreme Court decision affects a certain discharge of tariffs

into the economy, but there are certainly other avenues for the

president. I think the president's made quite

clear, you know, how he thinks about tariff and trade.

And I think while this administration is in place, that is going to be a

construct that we have to operate in. Of course, if there could be more an

economy, more certainty around exactly how that looks.

And I think the important thing is how it will look in longer perpetuity.

You know, of course, the market would appreciate that, but I think the market

operates knowing that there's a level of uncertainty around trade and trade

policy that that we just have to adapt to and we have to live with.

I wanted to get a bit more on why you're here, for example, in beautiful Sydney.

Do times like this of of increased global uncertainty, does it make a

relatively more idiosyncratic market like Australia more interesting?

Well, Australia has always been interesting market.

We have 400 people here. There are a lot of very, very important,

you know, companies in Australia. We have a good wealth business in

Australia. You know, Australia is an important

market and an important economy, not just for the world but also for Goldman

Sachs. So any market, any economy that's

important is important for Goldman Sachs given our global footprint.

I try to get here about once a year and I try to do it around an event like

this. So we've got a lot of our clients put

together, first of all, for this conference.

But this has always been, you know, this has always been an important market, an

important economy for Goldman Sachs. And, you know, I think that's

consistent, you know, in any environment.

So I was here the same week last week, and I'm excited to be back again this

year. What else are you excited about around

the region? Are they as a house?

Goldman Sachs is very bullish on China. Its, of course, National People's

Congress Week as well. What's your feel about that market,

given some of the crosswinds on trade, on tech, on geopolitics?

China's China is one of the largest, China's one of the largest economies in

the world. It's going to continue to be one of the

largest economies in the world. You know, at the moment, I'm very

focused on the bilateral relationship between the U.S.

and China. I'm looking forward to President Trump's

visit with President Xi that's planned for later this month, the beginning of

April. It'll be interesting to see what comes

out of that and, you know, whether or not China and the US can make more

progress, you know, on their bilateral relationship.

I think that's important for growth in the world, and I think it's important

for both the U.S. and China.

And I think at the moment that's fragile.

And so I'm very curious to see, you know, how that progresses.

In the meantime, Chinese markets have done very well in the last 12 months.

That's increased capital flows, you know, into the region.

We obviously participate in that, but we're going to watch those bilateral

meetings and progress in the bilateral relationship very closely.

What would you like to come out in terms of deliverables from China?

I'd like to see, you know, more certainty and clarity around how the

bilateral relationship will work going forward.

I think there are things that the U.S. wants and things that China wants.

I'd like more clarity around what that's going to look like, you know, not just

in 2026, but, you know, over the coming years.

And I think that's still relatively uncertain.

What are we not talking about enough to deliver that private credit?

You don't think it's sort of a systemic risk at this point?

I'm I, I think credit formation around the world is really correlated

to, you know, economic growth and economic activity.

I do think that we've gone if I just look at the US market, which is

obviously, you know, very when you talk about private credit, a very, very large

market in the context of private credit, we've got a long time without a credit

cycle, we've got a long time without a recession.

I do think when you have these long dated cycles, there are a variety of

things that happen. One, credit spreads narrow to lending

standards. People have more capital to play.

They get aggressive, lending standards deteriorate a little bit, due diligence

standards deteriorate. And so we're watching very closely to

see if there's been a little bit too much aggression frothiness in those

markets. But fundamentally, when you look at the

underlying credit portfolios, particularly below investment grade

credit, while there have been a bunch of idiosyncratic events where there have

been problems, the broad portfolios are performing reasonably well.

Why are they performing reasonably well? Because the economy is doing fine and

it's very hard to have broad underperformance and a broad diversified

credit portfolio if the economy's doing well.

When we do have a slowdown in the economy, you will see it.

I think because of the length of the cycle, you probably will find places

where the losses are higher than people expect where.

Very, very focused on back leverage and things that could affect or amplify in a

more difficult economic environment, you know, credit deployment.

But at the moment, when you look broadly across portfolios, we're not seeing

things that are super concerning. That's a completely different issue than

retail participation and retail investors wanting liquidity from what

are fundamentally illiquid products. And so that's getting a lot of

attention, but that's different than the underlying credit portfolios.

But I do think that when there is a slowdown in the economy or we do get to

a place where we have, you know, a recession, you're going to see losses in

credit portfolios. And, you know, those losses could be

meaningful. But, you know, we'll watch that closely

while the economy is chugging along. You know, that's that's not the primary

focus.