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Citigroup CEO: Europe More Likely to Head Into Recession Than US

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Citigroup CEO Jane Fraser warns that a recession is more likely in Europe than in the US. However, she emphasized that it is not easy for the US to avoid a recession.

Citigroup CEO on global recession

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Citigroup CEO Jane Fraser warned Friday about the state of the global economy, Reuters reported. Citi is the third largest global bank in the US.

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Speaking at an investor conference in New York, she spoke about how the “three Rs” affect the global economy, stating: “It’s the stakes, it’s Russia, and it’s a recession.”

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Fraser explained that Europe’s energy problems “really affect a number of companies in certain industries that are not even competitive right now.” She added that “some of them stop working … because of the cost of electricity and the cost of energy.” Citi CEO opined:

Europe definitely felt more recession-prone than you see in the US.

Major central banks are already planning to raise interest rates to fight inflation in preparation for the first round of global quantitative tightening. The move is expected to limit credit and add stress to an already slowing global economy.

Commenting on the actions of the European Central Bank (ECB), Frazier said: “It looks like the ECB is months behind the Fed in fighting inflation and does not have the same flexibility as the US.”

In the US, Frazier said, the issue is more about interest rates than recession. However, she noted that it would be difficult for the US to avoid a recession, stating:

This, of course, is not our base case, but it is not easy to avoid either.

On Wednesday, JPMorgan & Chase CEO Jamie Dimon said an economic “hurricane” is coming our way and advised investors to brace for impacts.

Goldman Sachs President and COO John Waldron warned of unprecedented economic turmoil and tougher times ahead.

In addition, Tesla CEO Elon Musk said he had a “very bad feeling” about the economy, prompting President Joe Biden to react. Musk also said that we are probably in a recession that could last 12 to 18 months.

What do you think of this Citigroup CEO comment? Let us know in the comments below.

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