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The market was in a state of panic.Goldman SachsCEO Solomon spoke calmly. He recently said that the recent correction in the US stock market may still be healthy. He believes that the US economy is not at risk of recession and expects the Federal Reserve to avoid taking emergency interest rate cuts. The Federal Reserve will cut interest rates one or two times this fall.

In a conversation with the media, Goldman Sachs CEO David Solomon analyzed and predicted the recent US economic and market situation.

Solomon expects the Fed to avoid an emergency rate cut because he believes the U.S. economy is avoiding a recession. "I don't think you're going to see any changes before September. The U.S. economy is going to be flat and we're probably not going to see a recession."

Solomon's latest statement comes at a time of great turmoil in global stock markets. Last Friday's US non-farm payrolls data showed that the US labor market was weaker than expected, and data released over the weekend showed that Warren Buffett's largest holdingappleThe slashing of about half of positions and the liquidation of popular carry trades pushed market panic to extreme levels, and global markets suffered a "Black Monday" on Monday.

Some Wall Street investment banks and some investors have increased their bets that the Federal Reserve will cut interest rates before its September regular meeting. The derivatives market reflected a 60% chance of a rate cut within a week on Monday. Although the market has regained some calm, investors believe that the Fed is unlikely to cut interest rates before its September meeting, but they still expect the Fed to cut interest rates by 50 basis points at the two-day FOMC meeting that ends on September 18.

Solomon is less aggressive in his expectations for a Fed rate cut. He said recently, “Based on the economic data we are seeing and the information from the Fed,I think we're likely to see one or two rate cuts in the fall.Solomon has previously said the market is too optimistic about the pace of rate cuts, and he even suggested in May that the Fed could still choose not to cut rates this year, but he has since tempered that view.

Solomon cited the impact on markets of last week’s Bank of Japan decision to raise interest rates, a move that forced many investors to exit so-called carry trades, where they borrow at low rates in Japan and buy higher-yielding assets elsewhere.

according toJPMorganStrategists at ETF.com said there is more room for unwinding of related carry trades as the yen remains undervalued.

Solomon pointed out that many investors had expected a soft landing for the U.S. economy, but some began to hedge against that forecast after the release of non-farm payrolls last week. For the July employment report, Solomon believes that the data is not bad, but weaker than people expected.

Goldman Sachs economists raised the chances of a U.S. recession next year to 25% from 15%.

Solomon also said that this volatility will continue for some time as the market readjusts to new economic data and revised expectations for Fed policy. "I do think that after a very strong run-up in the market, we are going through an adjustment, which is probably healthy. I think we're going to see more volatility in the short term. This is a pretty big, pretty significant adjustment."