Citi CEO Sees Pickup in Dealmaking With Recession Unlikely

Core Insights - Merger activity is rebounding as US companies gain confidence from clearer policy signals, with a recession appearing unlikely in the US economy [1][3] - Clients have become significantly more active in capital markets, driven by greater clarity on taxes, tariffs, and deregulation [2] - Citigroup's CEO forecasts a decade of strong growth in the Middle East, fueled by investment flows and the creation of new industries [7][8] Market Activity - Companies globally have announced over $1 trillion in deals since June, defying the typical summer slowdown [3] - Goldman Sachs forecasts approximately $3.1 trillion in deal flow for this year and a record $3.9 trillion for 2026, indicating strong momentum in the market [3] - Citigroup has benefited from increased client activity due to market volatility following tariff announcements [4] Economic Outlook - While Citigroup maintains a positive outlook on the US economy, it is closely monitoring the labor market, acknowledging that not all indicators are favorable [3] - Some industry peers express caution regarding the impact of global tariffs on the US economy and inflation, complicating forecasts for Federal Reserve policy [5] - Expectations for a reduction in interest rates by the Federal Reserve are prevalent, but there is uncertainty about the pace of future policy adjustments [6] Regional Focus - The Middle East is viewed as an attractive region for investment, with Gulf states diversifying away from oil and drawing in global financial firms [7][8] - Citigroup anticipates significant growth in the Middle East, supported by expanding business ties with India and China [8]