By Suzanne McGee and Saeed Azhar
NEW YORK (Reuters) -U.S. President Donald Trump’s criticism of Goldman Sachs’ (GS) research on tariff risks could prompt some analysts to water down their research, investors and academics said, an outcome that could leave investors with less reliable information.
The reams of research that banks such as Goldman produce are used by institutional investors, such as hedge funds and asset managers, in deciding how to allocate capital.
Trump’s comments — in which he lambasted Goldman, its economics team and CEO David Solomon and accused them of making “a bad prediction” — have triggered a debate on Wall Street about the possible fallout, according to interviews with banking industry sources and investors.
At one Wall Street bank, Trump’s comments spurred informal conversations among staff, a source familiar with the matter said. The source said they also discussed how to incorporate government data in the wake of Trump’s decision to fire the head of BLS, claiming — without evidence — that its data had been politicized. Still, the bank was not considering changing the way research operates.
“This is going to come down to a person’s ability to withstand a barrage of criticism from the Oval Office, and the extent to which these banks provide support for their chief economists,” said Dave Rosenberg of Rosenberg Research, who has worked in the economics departments at several banks. “If we notice that research is being watered down … then we’ll know that this has had an effect.”
Jack Ablin, chief investment strategist at Cresset Capital, said if banks do start self-censoring, smaller investors who do not have the resources to do their own analysis are likely to suffer most.
Trump’s criticism is his latest attack on corporate America and other institutions, and is a break from historical norms, where presidents have typically avoided calling out private companies and executives for things they do not like.
Some companies that have considered passing on tariff costs to customers have faced public criticism, and Trump, who came to politics after running businesses, has intervened directly in private business decisions by making a deal with Nvidia (NVDA) to give a portion of its revenues from sales to China of AI chips to the government.
Trump “certainly is taking a number of steps that diverge from the traditional view of the respective roles of the government and private industry,” said Henry Hu, a securities law professor at the University of Texas.