Goldman Sachs CEO David Solomon said Thursday that he expects capital markets to recover in the upcoming months.

“I think what we’re going through at the moment is a reset of valuation expectations,” he said in an interview with CNBC’s Jim Cramer. “In the coming months, we’ll see a little bit of a reopening in the capital markets when people get used to this valuation adjustment.”

While a low-interest rate environment allowed newly-minted companies to thrive and see their valuations swiftly balloon during the pandemic’s early stages, the initial public offerings market nosedived this year. U.S.-listed companies raised $4.8 billion in proceeds during the first half of 2022 compared to $155 billion in 2021, according to EY and Dealogic.

The main culprits include soaring inflation, the Federal Reserve’s interest-rate hikes, Russia’s invasion of Ukraine and Covid lockdowns that drove investors out of risky, high growth bets and into safer, defense stocks. 

While those headwinds continue to persist, Solomon says the market is adjusting to its new reality.

“There’s always a backlog of companies that need to go public,” he said. “We’re three quarters into a more difficult capital markets environment. History would tell you, three, four, five, six quarters you get that readjustment.”