Is A Recession on The Horizon? More Bank CEOs Think So
The comments below are an edited and abridged synopsis of an article by Elisabeth Buchwald, CNN
Citigroup CEO Jane Fraser is on a growing list of bank CEOs who are warning about tough times ahead.
The head of the third-largest US bank, Fraser sees a recession coming, according to remarks released by the Senate Banking Committee ahead of an annual hearing on Wall Street.
That recession could result because of factors such as persistent inflation in services, rising debt levels, a slowdown in global growth, and conflicts in Europe and the Middle East.
On the consumer spending side, Fraser said that Citi data suggests people are pulling back more. That aligns with recent government consumer spending data. At the same time, customers who fall in the lowest band of credit scores are taking on the highest levels of debt since 2019.
Bank of America CEO Brian Moynihan recently said that “the way consumers are spending money is leveling out. But all in all [consumers are in] pretty decent shape.”
He also suggested that the Fed is in the middle of pulling off a soft landing—that is, getting inflation under control without a significant spike in the unemployment rate.
JPMorgan Chase CEO Jamie Dimon recently urged Americans to prepare for a recession.
“A lot of things out there are dangerous and inflationary. Be prepared,” he said. “Interest rates may go up and that might lead to recession.”
In addition to Dimon, Fraser and Moynihan, lawmakers will hear testimony from the CEOs of Wells Fargo, State Street, BNY Mellon, Goldman Sachs and Morgan Stanley.