FORTUNE — Lloyd Blankfein, the CEO of Goldman Sachs, says watch out for the bond market. Blankfein, talking Wednesday at The New York Times‘ Dealbook conference, said there appears to be a general complacency about low interest rates when he talks to investors.
“I think that is one of the big risks that are looming out there right now,” says Blankfein.
Low interest rates have been good for his firm’s clients. He said Goldman (GS) is advising corporations to borrow as much as they can for as long as they can. Indeed, many companies appear to be taking that advice. There has been a record amount of corporate debt issuance this year.
But while low interest rates have been great for corporate borrowers, Blankfein says it may also be creating losses that we will have to deal with later. “Someone is buying that debt,” says Blankfein. “What’s going to happen when growth picks up and interest rates rise? There’s going to be a reversal and people will have losses.”
The reversal could happen soon. Blankfein says that recently he has noticed a change in the tone of his conversations with corporate executives. He says more of the talks have to do with positioning their firms for growth, and less about dealing with the issues of the financial crisis and the recession.
“I think we’re where we were in 1944,” says Blankfein. “The war isn’t over yet, but pretty much everyone sees the end soon.”
As for his own future, Blankfein says that he does believe with “near 100% certainty” that the next leader of Goldman will come from the firm’s own ranks. But he said he has no plans to leave his CEO post anytime soon.