Home Finance Citi CEO sees recession more likely in Europe than U.S.

Citi CEO sees recession more likely in Europe than U.S.

by Enochadmin

June 3 (Reuters) – Citigroup Inc (C.N) Chief Govt Jane Fraser mentioned on Friday that Europe was extra doubtless than the US to slide right into a recession, as she joined different world financial institution CEOs this week to warn in regards to the well being of the worldwide financial system.

Fraser, head of the third-largest and most globally centered U.S. financial institution, lately returned from a world tour with stops in Asia, Europe and the Center East, the place she mentioned her conversations centered on “the three Rs.”

“It is charges, it is Russia and it is recession,” Fraser mentioned, talking at an investor convention in New York.

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However Fraser mentioned in Europe, “the power aspect was actually having an affect on quite a few firms in sure industries that aren’t even aggressive proper now.”

“Due to the price of electrical energy and the price of power, a few of them are shutting down operations. So Europe undoubtedly felt extra more likely to be heading right into a recession than you see within the U.S.,” Fraser added.

Fraser mentioned in the US, the query is extra about rates of interest than recession.

“It is actually not our base case that it will likely be, nevertheless it’s not simple to keep away from both,” Fraser added.

On Wednesday, JPMorgan & Chase Co’s (JPM.N) Chairman and Chief Govt Jamie Dimon described the challenges going through the U.S. financial system as akin to a “hurricane,” whereas Goldman Sachs (GS.N) President and Chief Working Officer John Waldron mentioned on Thursday the present financial turmoil is likely one of the most difficult he has ever confronted. learn extra

Tesla Inc (TSLA.O) CEO Elon Musk added to the downbeat sentiment, saying he has a “tremendous unhealthy feeling” in regards to the financial system and wishes to chop about 10% of jobs on the electrical carmaker, in a message despatched on Thursday titled “pause all hiring worldwide.” learn extra

Nonetheless, Cleveland Federal Reserve Financial institution President Loretta Mester advised CNBC on Friday that she would not see a “hurricane” forward, however “we now have to comprehend that the dangers of recession have gone up.” learn extra

Main central banks, already plotting rate of interest hikes in a combat in opposition to inflation, are additionally getting ready a typical pullback from key monetary markets in a first-ever spherical of world quantitative tightening anticipated to limit credit score and add stress to an already-slowing world financial system.

“It feels just like the ECB is a number of months behind the place the Fed has been in getting its arms round inflation and with out fairly the identical flexibility that U.S. has,” Fraser mentioned, referring to the European Central Financial institution.

The U.S. job market stayed sturdy in Might, knowledge on Friday confirmed, with employers hiring extra employees than anticipated and sustaining a reasonably sturdy tempo of wage will increase. U.S. inventory indexes fell on Friday because the stable jobs report supported the view that the Federal Reserve would proceed on its aggressive coverage tightening path to chill decades-high inflation. learn extra

“Once we have a look at what the shoppers are speaking to us about from a macro perspective, I feel the arrogance continues to be fairly good amongst the CEOs and the CFOs,” Fraser added.

Fraser mentioned she additionally expects U.S. fairness markets to enter a interval of much less volatility and for the Chinese language authorities to launch a recent spherical of fiscal stimulus within the coming months, as that nation begins to open up from COVID-19 pandemic-related lockdowns.

In China, Fraser mentioned she “would not be shocked to see motion taken on fiscal stimulus.”

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Reporting by Elizabeth Dilts Marshall and Noor Zainab Hussain; Writing by Denny Thomas; Enhancing by Nick Zieminski, Will Dunham and Jonathan Oatis

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