Citi expects a recession as a result of several macroeconomic factors, including persistent inflation in services and rising debt, CEO Jane Fraser said today, December 6, during testimony before a Senate Banking Committee hearing.
“Although we don’t see a drastic downturn on the horizon, we do expect a recession as the result of a range of macroeconomic factors,” Fraser said in her opening remarks. “This includes persistent inflation in services, rising debt, a slowdown in global growth and two major conflicts in Europe and the Middle East.”
Fraser, along with seven other banking and financial services executives including JP Morgan CEO Jamie Dimon and Bank of America CEO Brian Moynihan, were called to testify today during the Banking Committee's annual oversight of Wall Street firms hearing.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Neither Dimon nor Moynihan commented on a recession in their opening remarks at the hearing. However, Dimon echoed similar concerns as Fraser when he spoke at the 2023 New York Times DealBook Summit last week.
“A lot of things out there are dangerous and inflationary,” Dimon said. “Be prepared. Interest rates may go up and that might lead to recession.”
Moynihan only mentioned that the economy is volatile and uncertain as he delivered opening remarks at the hearing.
A slowdown more likely?
Kiplinger staff economist David Payne reported last week that an economic slowdown is expected in the first half of 2024, but not a recession. “Despite the slowdown, 2024 growth should still be a moderate 1.7%.”
He added that the Federal Reserve is unlikely to raise interest rates anymore because of the expected slowdown. However, he said, the Fed "is also not likely to cut rates anytime soon because it is still determined to combat inflation. Inflation is on a downtrend, but the Fed wants to make sure it doesn’t get stuck at a level higher than 2%.”
Related Content
- Kiplinger's GDP Outlook: Slowdown in 2024 Will Be Short-lived
- Kiplinger's Jobs Forecast
- Kiplinger's Housing Forecast
- Kiplinger's Business Spending Forecast
-
New Trump Tax Bill: Five Changes Homeowners Need to Know NowTax Changes Trump’s new tax legislation is reshaping how tax breaks for homeowners work.
-
The Smart Way to Retire: 13 Habits to Steal From the WealthyCheck out these practical strategies that anyone can adopt, not just the rich, and get closer to achieving your retirement dreams.
-
Can President Trump Fire Fed Governor Lisa Cook?Markets hate uncertainty, especially when it comes to monetary policy and interest rates, and questions about the Fed are compounding.
-
Powell Signals Rate Cuts in His Jackson Hole Speech. Here's What Wall Street is SayingIn his speech at the Jackson Hole symposium Friday, Fed Chair Jerome Powell said current conditions "may warrant" rate cuts.
-
Trump-Era Regulations Will Broaden Access to CryptoThe Kiplinger Letter The president wants to make the U.S. the leader in digital assets.
-
July CPI Report Boosts Rate-Cut Odds: What the Experts SayThe July CPI report shows that tariffs are having a slight impact on inflation, though not enough to keep the Fed from cutting interest rates.
-
How Big Will the Fed Rate Cut Be This Fall?A dismal July jobs report has lifted expectations for fall rate cuts. How low could the fed funds rate be by year's end?
-
July Jobs Report Renews Rate-Cut Hopes: What the Experts Are SayingThe July jobs report shows weakening in the labor market and lifts expectations for a September rate cut.
-
Should You Buy These ETFs Before the Fed Cuts Rates?The Fed is likely to lower interest rates this fall, and tactical investors might want to look closer at these ETFs before rate cuts resume.
-
July Fed Meeting: Updates and CommentaryThe July Fed meeting came and went, with Fed Chair Powell saying little about a September rate cut and President Trump.
