In recent weeks, economists and top corporate executives have warned about tough times ahead. The latest corporate leader to weigh in on the topic is Amazon founder Jeff Bezos who warns that hard economic times are yet to come.
Bezos echoed Goldman Sachs CEO David Solomon’s remarks to CNBC bout the state of the economy. In a comment linked to Solomon’s video on “Squawk Box,” Bezos said that the prospects of the current economy require people to fasten their belts.
According to Solomon, it is time for investors and corporate executives to recognize the impending risks and take necessary measures.
Solomon commented following the release of his company’s quarterly earnings reports, which exceeded Wall Street expectations. However, he warned that depression might be on the horizon with the economy struggling to cope with chronically rampant inflation and the Federal Reserve that has been aggressively raising interest rates to cut prices.
I think you have to expect that there’s more volatility on the horizon. Now, that doesn’t mean for sure that we have a really difficult economic scenario. But on the distribution of outcomes, there’s a good chance that we have a recession in the United States.
According to Federal Reserve officials, a downturn could result from monetary policy tightening, who somehow seek to prevent one. In September, policymakers predicted that the GDP would increase by only 0.2% this year and just 1.2% next year. In Q1 and Q2 2022, GDP showed declines, a classic recession indicator.
There have been mixed signals from corporate executives in recent weeks regarding the state of the economy. For instance, JPMorgan Chase CEO Jamie Dimon recently warned of tough times ahead, stating that the situation was dire and the US could dip into a recession in six months.
On the other hand, Bank of America’s CEO Brian Moynihan told CNBC that considering spending is holding up based on credit card information and related data. Speaking on Closing Bell, Moynihan said that the consumer is strong and good in the current environment.
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