Jeff Bezos warns of an imminent economic crisis (AFP)
Join Jeff Bezos, founder of retail giant Amazon, andThe second richest man In America, to the list of warnings about the state of the American economy recently, warning of “difficult times are near.”
In a tweet on his social media account, “TwitterCommenting on the words of David Solomon, CEO of investment bank Goldman Sachs, Bezos said: “Yes, the possibilities in the current conditions of the economy force a knock on the doors,” an expression that means preparedness and caution, especially when expecting approaching crises.
Solomon had spoken in the wake of the announcement of his bank’s business results, which exceeded expectations and pushed the share price, and most financial institutions shares, higher on Tuesday, when he said that “there is a great opportunity for the US economy to enter a recession.”
After the Federal Reserve raised interest rates by 3% during the last seven months, and there were expectations of a rise of no less than 1.25% before the end of this year, there were calls for caution, so that the excessive increase in interest would not cause a decline in economic activity in the country.
And the Federal Reserve is pushing the need to continue raising interest rates, in the hope of eliminating the largest inflation the country has known in more than forty years.
The minutes of recent Fed meetings showed the Fed’s preference for exaggerated hikes rather than stops prematurely, so as not to repeat the tragedy of the 1980s, when the Fed cut rates prematurely, causing high inflation to return again.
In the wake of the Fed’s latest hike last month, by 75 basis points, Jeremy Siegel, a Wharton professor of finance, warned that the Fed would make “the biggest mistake in its more than 117-year history” by raising interest rates and causing income The economy is in recession.
Siegel said that inflation has already begun to decline in many markets, noting that the real result of raising interest rates does not crystallize in the markets before the passage of six months.
Last month, the Federal Reserve expected US gross domestic product to grow by only 0.2% in 2022, before returning to recovery in 2023, albeit at a rate of only 1.2%.
The gross domestic product shrank in the first and second quarters of this year, in line with the common definition of recession, in theory, which was denied by US President Joseph Biden, Secretary of Finance Janet Yalin, and Federal Reserve Chairman Jerome Powell in practice, pointing to the strength of the labor market and the stability of the labor market. The unemployment rate is near its lowest level in more than half a century.
and last week, Fitch downgraded Global credit rating outlook for US growth for this year and next.
The agency predicted a somewhat mild recession in America, and a rise in the unemployment rate from 3.5% now to 5.2% in 2024, which means the loss of millions of American jobs.
Two weeks ago, Jamie Dimon, CEO of JPMorgan, the largest US bank by assets, continued his warnings of future problems, stressing that the situation was “very, very dangerous”, and that the United States could slide into recession in the six months. coming.
The same view was supported by Brian Moynihan, CEO of Bank of America, who told CNBC on Monday that “credit card data, and related information, shows that consumer spending has stalled,” noting that the Fed’s efforts to curb Inflation could slow down the US economy.