In an interview with CNBC on Monday, Solomon, who has headed up the investment banking titan for almost half a decade, said he was “surprised” by how robust the American economy had been, and noted that he was seeing “green shoots” coming through in capital markets.

“The U.S. economy has been incredibly resilient,” he said. “I certainly predicted given the economic tightening we’ve seen, you know, a bumpier ride than we’ve had so far.”

However, that did not mean he believes everything is smooth sailing from here on out.

“I think we’re at an uncertain [economic] moment,” Solomon said. “I think it’s a period to be a little bit cautious.”

He warned that even if the U.S. economy manages to “muddle through here with a much softer landing than we would have expected,” the country could still wind up in a scenario that “might not be a recession, but certainly would feel like a recession.”

In this situation, he said Americans would have to contend with “sluggish growth and sticky inflation.”

If the U.S. did enter a downturn, Solomon said, it wouldn’t be likely to happen until late this year or early 2024, but he said the persistently low unemployment rate would make it “hard to have a recession.”

Economic uncertainty over the past year has created a lot of debate over the likelihood of a recession rocking the United States.

Economists at Goldman Sachs recently lowered the odds of a U.S. recession taking hold in the next 12 months to 25%, following a deal being made on raising the country’s debt ceiling. The bank’s COO, John Waldron, said earlier this month that a U.S. recession “may not happen” at all.

Not everyone is in agreement with Goldman Sachs, however.

Some of the world’s biggest bond managers are still bracing themselves for a downturn, while big-name investors including Stan Druckenmiller and Nouriel Roubini (a.k.a. “Dr. Doom”) are still warning that America is at risk of a “hard landing.”

Real estate ‘bumps’

Meanwhile, Solomon predicted commercial real estate—a sector worth as much as $2.3 trillion to the U.S. economy that supports an estimated 15 million jobs—would continue to come under pressure, inflicting more pain on banks and the economy.

While Solomon said Monday that he doesn’t think the Fed will raise interest rates at its upcoming policy meeting this week, he cautioned that persistent inflation could sway the central bank toward further rate hikes at some point in the future—which will “probably make the economic environment a little bit more challenging.”

Higher borrowing costs, brought on by 10 consecutive interest rate hikes, coupled with lower occupancy rates amid the pandemic-induced shift toward remote work has squeezed commercial real estate all over the world.

In the first quarter of this year, Goldman Sachs posted impairments of around $355 million related to consolidated real estate investments, with the lender having invested in the commercial real estate space over the past decade, according to Solomon.

“There’s no question that the real estate market, and in particular commercial real estate, has come under pressure,” he told CNBC. “You’ll see some impairments in the lending that would flow through our wholesale provision [this quarter]. That’s just something that we’re going to have to work through—there’ll probably be some bumps and some pain along the way for a number of participants.”