Jeff Bezos Warns Of Tough Times Ahead
The founder of retail giant Amazon Inc. (AMZN) Jeff Bezos is the latest businessman to sound the warning bell about the state of the economy, saying that it is hard times ahead.
In a tweet posted Tuesday evening, Bezos expressed the same sentiments as Goldman Sachs Chief Executive David Solomon said in an interview to CNBC.
Bezos said, “Yep, the probabilities in this economy tell you batten down the hatches.”
Solomon had said that the time has come for both corporate leaders and investors to understand the risks that are building up, and to prepare accordingly.
Solomon was speaking after his company posted earnings, which came in above Wall Street expectations. He said, “A recession could be looming as the economy deals with persistently high inflation and a Federal Reserve trying to lower prices through a series of intense interest rate hikes.”
The head of the banking firm added, “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.”
Fed officials said that a recession is possible due to the tightening of the monetary policy even as they hope to escape a downturn. In September, policymakers expected the GDP to grow at 0.2 percent in 2022 and rebounded in 2023. However, 1.2 percent GDP contracted in both the first and second quarters this year, meeting a commonly held definition of a recession.
Corporate houses have been given different signals about the economy. Bank of America CEO Brian Moynihan told CNBC recently that that credit card data and related information show that consumer spending has held up.
“In the current environment, the consumer is quite good and strong,” he said.
Moynihan admitted that the Fed’s efforts could slow the economy, but noted that “the consumer’s hanging in there.”
Source: Read Full Article