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Top Wall Street CEOs revive warnings about US economic recession as inflation rages
The odds of recession are very high: Former IMF chief economist
Former IMF Chief Economist Kenneth Rogoff discusses Biden claiming that Democrats are ‘fiscally responsible’ on ‘Fox Business Tonight.’
Two of Wall Street's most notable CEOs renewed their warnings about the likelihood of a recession as stubbornly high inflation keeps the Federal Reserve on an aggressive interest rate hike path.
Speaking at Saudi Arabia's investment conference in Riyadh — nicknamed "Davos in the Desert" — both Goldman Sachs CEO David Solomon and JPMorgan Chase CEO Jamie Dimon struck a pessimistic tone about the state of the U.S. economy.
Solomon said he anticipates that economic conditions would "tighten meaningfully from here," and that the Fed could hike rates beyond the expected peak range 4.5% to 4.75% if inflation does not cool and the labor market remains extremely tight. The benchmark federal funds rate is currently at a range of 3% to 3.25% after Fed policymakers approved five straights increase this year.
"But if they don’t see real changes — labor is still very, very tight, they are obviously just playing with the demand side by tightening — but if they don’t see real changes in behavior, my guess is they will go further," he said. "And I think generally when you find yourself in an economic scenario like this where inflation is embedded, it is very hard to get out of it without a real economic slowdown."
INFLATION SURGED MORE THAN EXPECTED IN SEPTEMBER AS PRICES REMAIN PAINFULLY HIGH