May 27, 2024

Solid State Lighting Design

Find latest world news and headlines today based on politics, crime, entertainment, sports, lifestyle, technology and many more

Goldman Sachs’ Lloyd Blankfein warns of a ‘very high risk’ of recession

Goldman Sachs' Lloyd Blankfein warns of a 'very high risk' of recession

Former Goldman Sachs CEO Lloyd Blankfein has warned US businesses and consumers to prepare for a recession as the Federal Reserve tightens its policy to combat high inflation.

Speaking to CBS News on Sunday, Blankfein, who resigned as Goldman president in October 2018 and remains the first president of Wall Street Bank, said there was a “very high risk” that the US economy was heading into a recession.

“If I was running a big company, I would be very prepared for it. If I was a consumer, I would be prepared for it,” said Blankfein.

Blankfein said the massive amounts of government incentives being offered to reduce the economic impact of the Covid-19 pandemic, as well as supply chain issues, lockdowns in China and the war in Ukraine, have contributed to the rise. economic inflation Which the Fed was now fighting.

“The Fed has very powerful tools. It’s hard to fine-tune and hard to see its effects fast enough to change it. I think they’re responding well,” Blankfein added.

Federal Reserve Chairman Jay Powell this week warned Reducing inflation to the US central bank’s 2 per cent target would cause “some pain”. Fed earlier this month Starch It averaged its standard policy by half a percentage point for the first time since 2000, and said other increases of the same size should be on the table at its next two meetings.

David Solomon, Blankfein’s successor as Goldman’s CEO, was less specific about the possibility of a recession when asked about the impact of higher Fed rates on the bank at Goldman’s annual shareholder meeting last month.

See also  Uber will start showing drivers how much they will charge to accept the ride

“Our economists think the chance of a recession here in the US over the next few years is about 30 percent,” Solomon said. “But again, this is unknown, and there is a huge disparity in the results, so we will be watching that closely.”