Trump needs to strike some trade deals so people can 'start to plan,' says Goldman Sachs CEO David Solomon

• David Solomon said a trade deal format would give investors clarity and help them plan for the future.
• The Goldman Sachs CEO said investors were concerned about the level of policy uncertainty.
• Solomon said a clear road map for deals would boost confidence and help stock markets.

David Solomon said it would be useful for the Trump Administration to start striking some trade deals to show investors how they could work.

The Goldman Sachs CEO told CNBC's "Squawk Box" on Tuesday: "It would be good to see a deal or two put forward so there's a construct that people can understand, and people can say OK, so that's what these deals are going to look like, this is a framework that we can start to think about and we can start to plan as we look forward."

"The one thing I know for sure is that if you can create a road map and a clear understanding as to where we're going and what the desired result is, confidence will improve equity market prices," he added.

Solomon explained that financial markets tended to overreact in the short term because investors take time to digest macroeconomic changes such as President Donald Trump's "reciprocal" tariffs.

"If we don't get to a policy place of certainty, where people can trust and they can rely, it will have longer-term implications," he said.

Investors were concerned by the level of uncertainty and the pace of change, Solomon said: "We're in a very different macro environment than we were in just a few months ago."

Solomon used the words "certainty" and "uncertainty" more than five times in the interview.

As Trump's inauguration neared in January, there was optimism about the prospect of lower regulation, he said.

"Now we're a few months into the administration, and instead of policy becoming more certain, we actually have a greater sense of uncertainty broadly, and it's having a big impact on asset prices and markets," Solomon told CNBC.

"Markets are looking to reprice the value of things based on the uncertainty they have around what these policies will ultimately look like, and how they will ultimately be implemented, and that is therefore causing shifts in fund flows on a very significant basis."

IMF downgrade

On Tuesday the International Monetary Fund slashed its forecast for US economic growth this year by 0.9 percentage points to 1.8% compared with its January forecast.

The IMF did not expect a US recession, but now rated the odds at 40% compared with 25% in October.

Its forecast for global growth was also downgraded by 0.5 percentage points to 2.8%.