07 Jun Citigroup CEO: Europe More Likely to Head Into Recession Than US
Citigroup CEO Jane Fraser warns that a recession is more likely in Europe than in the U.S. Nonetheless, she stressed that it is not easy for the U.S. to avoid a recession.
Citigroup’s CEO on Global Recession
Citigroup CEO Jane Fraser warned about the health of the global economy Friday, Reuters reported. Citi is the third-largest and most globally-focused U.S. bank.
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 definitely felt more likely to be heading into a recession than you see in the U.S.
Major central banks are already planning interest rate hikes to fight against inflation, preparing for the first round of global quantitative tightening. The move is expected to restrict credit and add stress to an already-slowing 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.”
In the U.S., Fraser said the question is more about interest rates than recession. However, she noted that it will be difficult for the U.S. to avoid a recession, stating:
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.
Goldman Sachs President and Chief Operating Officer John Waldron warned of unprecedented economic shocks and 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 also said we are likely in a recession that could last 12 to 18 months.
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