Jane Fraser, Citigroup’s CEO, says a recession will likely be more common in Europe than the United States. She stressed, however that it’s not simple for the U.S. avoid a recession.
Citigroup’s CEO on Global Recession
Reuters reported that Jane Fraser (CEO Citigroup) warned of Friday’s danger to the global economic health. Citibank is America’s third largest bank and has the most global focus.
Speaking at an investor conference in New York, she talked about how “the three Rs” are affecting the global economy, stating: “It’s rates, it’s Russia, and it’s recession.”
Fraser explained that Europe’s energy problems are “really having an impact on a number of companies in certain industries that are not even competitive right now.” She added that “some of them are shutting down operations … because of the cost of electricity and the cost of energy.” The Citi executive opined:
Europe felt much more like it was heading for a recession that you would see in the U.S.
The first round of quantitative tightening is underway in the global central banks, which are planning to increase interest rates to counter inflation. It is anticipated that the move will reduce credit and cause more stress for an already fragile world economy.
Commenting on the European Central Bank (ECB) action, Fraser said: “It feels like the ECB is a few months behind where the Fed has been in getting its arms around inflation and without quite the same flexibility that U.S. has.”
Fraser in the U.S. stated that it is about the interest rates more than the recession. She noted, however, that the U.S. will have to be able to avoid a recession.
It’s certainly not our base case that it will be, but it’s not easy to avoid either.
On Wednesday, JPMorgan & Chase CEO Jamie Dimon said an economic “hurricane” is coming our way, advising investors to brace for impact.
John Waldron (Goldman Sachs Chief Operating Officer) warned about unprecedented economic shocks. He also predicted tougher times ahead.
Furthermore, Tesla CEO Elon Musk said he has a “super bad feeling” about the economy, prompting President Joe Biden to respond. Musk stated that we may be experiencing a recession lasting 12 to 18 more months.
What do you think about this the comments by Citigroup’s CEO? Comment below.
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