Goldman Sachs CEO David Solomon speaks on CNBC’s Squawk Box at the World Economic Forum in Davos, Switzerland on January 22, 2026.
Oscar Molina CNBC
when goldman sachs When executives were asked this week about the disappointing results of the company’s fixed income division, they acted as if the trading environment simply wasn’t in their favor.
Fixed income revenue fell 10% in the first quarter, $910 million less than analysts expected, according to Street Account data. It was an extraordinary failure for one of Goldman’s flagship Wall Street firms.
“It’s basically just the overall environment shaping the market,” Chief Financial Officer Dennis Coleman told analysts after the bank’s earnings report on Monday. “While we continue to actively engage with our customers, interest rates and mortgage performance have been relatively weak.”
But like nearly all of Goldman’s rivals, JP Morgan Chase, morgan stanley and citygroupwhich in the days that followed announced blockbuster results in the bond market for the first quarter, made one thing clear on Wall Street: Goldman Sachs’ vaunted bond traders were underperforming.
JPMorgan’s fixed income trading revenue rose 21% to $7.1 billion, the second-highest revenue in the bank’s history. Morgan Stanley saw its fixed income business rise 29% as bonds are less prioritized than stocks. Citigroup’s fixed income trading revenue rose 13% to $5.2 billion.
Even before the 2008 financial crisis, when Lloyd Blankfein led Goldman Sachs, the firm’s fixed income division was the envy of Wall Street. Goldman is known for its trading ability, and its reputation was forged during a turbulent era when its desks generated huge profits. The bank’s identity as a trader’s company is expected to outperform during times of turmoil, and has endured for more than a decade since then.
So the first quarter’s stumbling is especially noticeable.
“It looks like something went wrong in Goldman’s fixed income division,” said Mike Mayo, a veteran Wells Fargo analyst, calling Goldman’s performance “worst in class.”
“At Goldman, I imagine the FICC traders, managers and risk supervisors are under fire after such a poor performance,” Mayo said in an interview with CNBC, using the business’ official name, an acronym for Fixed Income, Currencies and Commodities.
The conventional wisdom is that Goldman was caught offside in the first quarter on interest rate-related trades, according to multiple market participants who spoke frankly on condition of anonymity.
That’s because of the positioning many on Wall Street held earlier this year, when the market expected the Fed to cut rates at least twice in 2026, the people said.
But after the outbreak of the Iran war sent oil prices soaring and raised inflation expectations, markets began pricing in production cuts, with some investors even bracing for a potential interest rate hike later this year.
Bonds were the only blemish in a quarter in which Goldman Sachs easily beat expectations thanks to stock traders and investment bankers. Despite the higher profit, the company’s shares fell about 4% on Monday following the report.
Goldman Sachs declined to comment. But on Monday, CEO David Solomon sought to put the quarter’s results into context.
“When you look at the size and diversity of our business, we’re doing very well,” Solomon said on the company’s conference call. “In some areas, it’s going to be even stronger here and there.”
