Key Points
- U.S. President Trump publicly attacked Goldman Sachs for its research on the negative impact of his tariffs.
- This has created fears that Wall Street analysts will start self-censoring their work to avoid criticism.
- Goldman Sachs has defended its research, but other banks have remained quiet on the issue.
- The incident raises concerns about the independence and reliability of financial analysis.
President Donald Trump’s recent public attack on Goldman Sachs research is raising fears that Wall Street analysts might start pulling their punches to avoid the White House’s wrath. The concern is that this could lead to “watered-down” research, leaving investors, especially smaller ones, with less reliable information to make decisions.
The controversy started when Trump slammed Goldman for a report concluding that his tariffs would hurt the U.S. economy.
In a social media post, the president called the research a “bad prediction” and argued that foreign companies are paying the price, not Americans. This public criticism is unusual for a president. It is part of a broader pattern of Trump directly intervening in the private sector, similar to his recent deal with Nvidia over its chip sales to China.
Goldman’s top U.S. economist publicly defended the bank’s research, vowing to “keep doing” what they do. However, the incident has sparked a debate about the potential for self-censorship.
One expert noted that it will now come down to an analyst’s “ability to withstand a barrage of criticism from the Oval Office.” There’s already been evidence of this chilling effect, with a JPMorgan strategist admitting earlier this year he held back some of his thoughts on tariffs.
For investment banks, the stakes are high. Their reputations—and their business—depend on providing independent, objective analysis. “Investment banks live and die by their reputation and independence,” said one banking analyst. If investors can’t trust the research, it could make markets less efficient and riskier for everyone involved.
