Is A Recession Looming? Two Big Bank CEOs See It That Way
Recession is likely, Citi's CEO told a Senate panel today, a sentiment echoed by JP Morgan's chief executive last week.
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.
Sign up for Kiplinger’s Free E-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
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.
-
Come as You Are: Wealth Management for Gen X
Gen X is stuck in the middle of kids and aging parents, but retirement's not far off. Time to prioritize, with help from Nirvana, The Eagles and David Bowie.
By Alvina Lo Published
-
New Job? Time to Start a 401(k) Plan
Whether you're starting a new job or have never opened a 401(k) account, it's time! Here's how to open an account in five steps.
By Adam Shell Published
-
Strong September Jobs Report Puts Soft Landing in Sight: What the Experts Are Saying
Jobs Report A blowout reading on nonfarm payrolls takes another jumbo-sized cut to interest rates off the table.
By Dan Burrows Published
-
Fed Goes Big With First Rate Cut: What the Experts Are Saying
Federal Reserve A slowing labor market prompted the Fed to start with a jumbo-sized reduction to borrowing costs.
By Dan Burrows Published
-
Will the Fed Cut Rates in September? Here's What Experts Predict
The race is already on to predict the trajectory of future reductions to borrowing costs.
By Dan Burrows Last updated
-
Mixed August CPI Report Seals September Rate Cut: What the Experts Are Saying
CPI A good-but-not great reading on consumer inflation sets up the Fed to reduce rates by a quarter-point at its next meeting.
By Dan Burrows Published
-
Mixed Jobs Report Keeps Fed on Track for Rate Cuts: What the Experts Are Saying
Jobs Report The Fed will cut rates this month. The only question is by how much.
By Dan Burrows Published
-
Kiplinger Special: How Businesses Should Budget for 2025
Kiplinger Forecasts From fuel to AI software subscriptions, here's what you can expect to pay next year.
By John Miley Published
-
July CPI Report Supports September Easing: What the Experts Are Saying About Inflation
CPI The continued downtrend in inflation raises the odds for a September rate cut from the Federal Reserve.
By Dan Burrows Published
-
Weak July Jobs Report Signals Steep September Rate Cut: What the Experts Are Saying
Jobs Report A marked slowdown in hiring and rising unemployment means the Fed might have to make steep cuts to interest rates soon.
By Dan Burrows Last updated