Iran war volatility hits Goldman Sachs rates desk, triggers losses

Goldman Sachs’ rates desk took losses on some positions late in the quarter after volatility tied to the Iran war forced the firm to hold inventory as a market maker. The setback landed inside a business that can look strong on a firmwide print while individual desks absorb the damage.

The hit was concentrated in Goldman’s U.S. nonlinear gamma rates desk, overseen by Arvind Giridhar. The move in interest rates after the U.S. and Israel strikes on Iran helped drive the losses, showing how quickly geopolitical shocks can change the economics of a trading floor. In a market like that, being right on direction is not enough if the desk has to warehouse risk while clients rush for liquidity.

The numbers still looked strong at the top of the house. Goldman reported first-quarter net revenues of $17.23 billion, net earnings of $5.63 billion, diluted earnings per share of $17.55, and a 19.8% annualized return on common equity. But the FICC franchise was softer underneath that headline, with net revenues of $4.01 billion, down 10% from a year earlier. Goldman said the decline came from lower revenue in interest rate products, mortgages and credit products, partially offset by stronger commodities and currencies.

That split matters for employees across markets. Record equities trading revenue helped make the quarter Goldman’s second-highest ever for revenue, but the rates miss puts a spotlight on how compensation conversations can become more complicated when one desk is under pressure and the firm still beats expectations overall. Traders and managers know that end-of-quarter P&L can shape how risk is viewed, how aggressively positions are funded, and how senior leaders talk about future staffing and capital allocation.

John Waldron, speaking in Washington, D.C. on April 16, said he had no concerns about Goldman’s FICC business and described the quarter as a timing issue rather than a structural problem. That message is meant to calm nerves, but the underlying lesson for the floor is more practical: when volatility spikes, the book can move against you fast, and strong client flow does not eliminate inventory risk.

Goldman’s 2025 annual report says Global Banking & Markets is positioned to benefit from strong client flows across FICC and equities, and it says firmwide net revenues have risen by roughly 60% since Investor Day 2020 while total shareholder return has topped 340%. Those are the kinds of numbers that keep pressure high. They also explain why a rough patch on one rates desk can still trigger outsized scrutiny inside a firm that expects every quarter to justify the next.