Goldman Sachs /zigman2/quotes/209237603/composite GS +0.33% CEO David Solomon said Tuesday that monetary policy will likely have a bigger impact on markets than the pandemic as central banks around the world take steps to tackle inflation. While flare-ups such as the omicron variant could roil markets in the short-term, Goldman Sachs is expecting the economy to continue its recovery in 2022 and beyond, Solomon told CNBC. Solomon said it's unlikely that the double digit percentage gains in the S&P 500 /zigman2/quotes/210599714/realtime SPX -0.15% in the past three years will become the norm in coming years. "I'm not a believer that double-digit equity returns compounding in perpetuity is something as an investor you should expect," he said. Monetary and fiscal policy remain critical amid jitters in the market around inflation and monetary policy by the U.S. Federal Reserve, he said. "We've had unprecedented monetary and fiscal policy for a meaningful amount of time and we're going to emerge from that and unwind that," Solomon said. "That's going to have a big impact on asset prices, market activity and a variety of things. There's going to be an impact on things as we unwind it and find the balance." Looking ahead, the big unknown is whether monetary policy makers can ease inflationary pressure without causing markets to decline sharply. "The thing we don't have the answer to is, can that be done in a smooth way where we take a little bit of the air out without a lot of bumps and volatility, or are we going to have some bumps and volatility along the way?" Solomon said. Solomon's comments came as bankers gathered for the Goldman Sachs Financial Services Conference. Wells Fargo /zigman2/quotes/203790192/composite WFC +1.03% CEO Charlie Scharf urged the Fed to move more quickly to stem inflation. "Inflation is very, very real," Scharf said, as reported by Reuters. "Prices are significantly higher for inputs across most industries. Labor shortage and wage increases are extremely real. Whether that continues for several years is not all that relevant but it certainly will have an impact over the next year or so."