City Group Jane Fraser, CNBC’s chief executive, said she’s convinced Europe is headed into a recession.
speaking in World Economic Forum On Monday, Fraser said a combination of factors, including the war in Ukraine and the resulting energy crisis, have made Europe vulnerable to a major downturn even as other parts of the world are showing some signs of resilience.
“Europe is in the midst of storms of supply chains and an energy crisis, and it’s clearly close to some of the atrocities happening in Ukraine,” she said. Jeff Cutmore.
Asked if these factors made her convinced that Europe would experience a recession, Fraser said: “Yes.”
European energy costs have risen in recent months amid Russian sanctions, while a broader rise in inflation is fueling a cost-of-living crisis.
The Wall Street chief did not give a timetable for deflation. However, in October 2021 I expected a ‘hard winter’ The markets were largely accurate, as the stock markets embarked on a major sell-off in early 2022 with losses continuing even today.
The United States, which has so far shown “greater resilience” in the economy, the labor market and among consumers, may avoid a recession, Fraser said. However, a lot depends on how the Federal Reserve implements its interest rate hike strategy with persistently high inflation.
“There’s some buffer there,” she said. “Let’s see if it is used wisely or not.”
She said Asia, meanwhile, is recovering well from the COVID-19 pandemic, and is showing a “sense of optimism”.
Jane Fraser, chief executive of Citi, says she is convinced that Europe will fall into recession as it grapples with the impact of the war in Ukraine and the resulting energy crisis.
Patrick T. Fallon | Agence France-Presse | Getty Images
Fraser was speaking at a session titled “Global Economic Prospects”, which was joined by François Villeroy de Gallo, Governor of the French Central Bank and policy maker at the European Central Bank.
Villeroy de Gallo said he “would not agree” with Fraser’s forecast for the European economy, calling it “resilient” instead.
“The main problem, in the short term at least, is inflation,” he said. “That’s why we have to normalize monetary policy.”
The European Central Bank on Friday gave the strongest signal yet that it will Soon start raising interest rates – Likely in July – market players are now signaling at least four price increases before the end of the year.
The European Central Bank has always resisted raising interest rates, and it has insisted Price pressures will diminish In the second half of the year.
Eurozone inflation hit a record high for the sixth consecutive month in April The ongoing war in Ukraine The subsequent impact on Europe’s energy supply affected the region’s economy.
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