Goldman Sachs’ Blankfein Advises Companies and Consumers to Prepare for US Recession — Says It’s a ‘Very, Very High Risk’ – Economics Bitcoin News

Lloyd Blankfein, a former CEO of Goldman Sachs and Senior Chairman at Goldman Sachs, has advised that consumers and businesses should be prepared for the possibility of a U.S. recession. He stressed that it’s a “very, very, high risk.”

Goldman’s Blankfein Warns About a Recession

Lloyd Blankfein, a former Goldman Sachs CEO who is now the firm’s senior chairman, warned about an impending recession in the U.S. in an interview with CBS News, aired Sunday. In an interview with CBS News, Blankfein warned that both consumers and businesses should prepare for the worst.

Blankfein was the chairman and chief executive of Goldman Sachs, a global investment bank. He served this role from 2006 to September 2018. Through December 2018, he was still chairman and is currently senior chairman for the Goldman Sachs Group.

He was asked, “Do you think we’re headed towards recession?” Blankfein replied:

We’re certainly heading. It’s certainly a very, very high risk factor … If I were running a big company, I would be very prepared for it. If I was a consumer, I’d be prepared for it.

However, the Goldman Sachs senior chairman explained that a recession is “not baked in the cake,” noting that there’s “a narrow path” to avoid it.

Commenting on the Federal Reserve’s response to inflation, he said, “I think they’re responding well.” He added, “I think the Fed has very powerful tools.”

Blankfein was asked if the Fed is doing what’s needed to control inflation. He replied: “there’s an imbalance, too much demand. And what you have to do is you have to slow down that demand.” The former Goldman CEO elaborated:

It is necessary to slow down economic activity. And so they’re going to have to raise rates. They’re going to have to curtail, hopefully reduce the number of positions that are unopened because they- and increase the size of the labor force.

“This inflation, some of it is sticky … we have something like 8% inflation. Some of it is temporary. [and]It will all end. The war in Ukraine is going to end eventually. Some of the supply chain shocks will go away, but some of it will be a little bit stickier and will be with us for a while,” he concluded.

Many analysts predict that the U.S. would be in recession. Deutsche Bank predicts a U.S. major recession within the next year. Blankfein’s own investment bank, Goldman Sachs, said the odds of a recession happening in two years is 35%. Furthermore, Bank of America‘s strategist warned in April that a “recession shock” is coming.

What do you think about Lloyd Blankfein’s comments? Please leave your comments below.

Kevin Helms

Kevin, a student of Austrian Economics and a Bitcoin evangelist since 2011, was one of the first to discover Bitcoin. His main interests are in Bitcoin security, open source systems, network effects, cryptography, and intersections between economics, cryptography, and Cryptography.