Wells Fargo’s CEO Warns US is Heading Economic Downturn

    On Tuesday, Wells Fargo & Co. CEO Charlie Scharf said that there’s “no question” of an economic downturn in the US, and recession will be hard to avoid.

    Wells Fargo CEO is the latest high-profile, joining former CEO Blankfein of Goldman Sachs, saying the US is heading for a recession.

    At The Wall Street Journal’s Future of Everything Festival, Scharf said that “it’s going to be hard to avoid some kind of recession.”

    Wall Street Journal reported:

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    The Federal Reserve  and plans to keep doing so, part of its bid to cool the economy and curb red-hot inflation. Higher rates have pushed up borrowing costs for mortgages, credit cards and other loans. The Fed’s moves have raised the question of whether the U.S. is headed toward a recession, which some investors fear could happen if the Fed raises rates too quickly.

    “It’s going to be hard to avoid some kind of recession,” Mr. Scharf said Tuesday at The Wall Street Journal’s Future of Everything Festival.

    But Mr. Scharf also noted that consumers and businesses are still financially healthy by many measures.

    “The fact that everyone is so strong going into this should hopefully provide a cushion such that whatever recession there is, if there is one, is short and not all that deep,” he said.

    Banks are often viewed as a proxy for the wider economy. Concern that the central bank’s tightening will hamper economic growth , including Wells Fargo. Shares of the San Francisco-based bank are down about 9% since the beginning of the year, compared with a roughly 14% drop in the S&P 500.

    This week, the United States Senate overwhelmingly passed legislation to send another $40 billion to Ukraine as inflation rages here at home and US gas prices hit another all-time record high.

    Gas prices reached $4.59 on Saturday. This was a new all-time record high for gas prices in America. It was the 12th straight day of all-time record high gas prices.

    The Bureau of Labor Statistics (BLS) came out with its inflation report last month, reaching a 40-year high, and it shows the Producer Price Index stands at 11%. According to Investopedia, The producer price index (PPI) measures inflation from the perspective of costs to industry or producers of products.

    The current Bidenflation rate is 8.3% in April from a 41-year high of 8.5% in March. The rate was higher than expected at 8.1%.