Exclusive: Goldman Sachs CEO expects stronger merger activity this year

The big picture: As noisy as markets have been lately — the war in Iran, tariff drama, worries about bubbles in AI and private credit — Solomon's view is that a lighter regulatory environment will win out when it comes to corporate dealmaking.

What they're saying: "We also expect strategic activity to accelerate. Now that there has been a change in the regulatory environment, boards and CEOs feel there is a greater likelihood that they can execute on strategic transactions to expand their scale or improve their competitive position, and they are taking a much more front-footed approach," Solomon wrote in the letter, a copy of which was obtained exclusively by Axios.

Solomon touched on a number of hot-button issues in the letter, including:

• 🇮🇷 Iran: He said it would be "difficult to predict the broader economic effects of the military action," though on balance the firm still expects a stronger operating environment this year.
• 💰 Private credit: Solomon said recent fears about exposure to software companies vulnerable to AI are "a reminder that the credit cycle has not been repealed."
• 🤖 AI: "(The) opportunity for productivity gains is extraordinary," Solomon wrote, though he noted questions about how quickly it will be adopted and said there are "likely to be periods of recalibration."