From Bill Gates to Elon Musk, these famous people have hinted at an 'impending' recession in the US

SUMMARY

The US Federal Reserve recently set markets scrambling as it hiked its key policy rates by 75 basis points. These hikes come as the Joe Biden administration and the Federal Reserve are making a host of policy decisions to tackle a 40-year record high inflation. While these decisions may well control the red-hot rates, many predict that the pendulum would swing too far in the other direction and result in a recession in the US economy. A recent survey of economists, fund managers and investment strategists by CNBC saw 57 percent of the respondents stating that they expected the US to bear a period of recession as a result of the Fed’s rate hikes. August 2023 is the average month when the respondents expect the recession to arrive and over half believe that it would be a moderate recession. Here are some of the biggest names who see the US heading for a recession in the coming months-

By CNBCTV18.comJun 21, 2022 6:54:07 AM IST (Published)

Larry Summers |The former United States Secretary of the Treasury from 1999 to 2001, a role equivalent to the Minister of Finance in India, Larry Summers, said that the US economy would see a recession in the next two years. Summers noted that whenever inflation has risen above 4 percent and unemployment has dipped below 4 percent, both benchmarks that have been crossed in the US, the world’s leading economy has suffered from a recession.

Adena Friedman |Speaking at a panel at the World Economic Forum, Adena Friedman, CEO of one of the biggest stock exchanges in the world – Nasdaq, cautioned that predictions of a recession could be one of the reasons that lead to one in the first place. Stating that such predictions can erode consumer confidence, at the same time that markets remain volatile, which increases the actual risk of recession in her eyes, reported the Washington Post.

Lloyd Blankfein | In an interview with CBS, senior chairman at financial services major Goldman Sachs, Lloyd Blankfein said that there was a "very, very high risk" of recession, but added that the Fed had powerful tools to prevent it as well.

David Solomon | Goldman Sachs CEO David Solomon told CNBC that there is a 30 percent chance of a recession in the next 12 to 24 months. “There's a reasonable chance at some point that we have a recession or we have very, very slow sluggish growth," he said.

Elon Musk |The world’s richest man and the CEO of SpaceX and Tesla, Elon Musk said that the US was already in a recession due to the rally that has gone on for too long. Musk warned that further misallocation of capital could make things worse in the coming months.

Bill Gates | Microsoft co-founder Bill Gates expects factors like Russia’s war in Ukraine to accelerate inflationary problems that rich world economies have and force an increase in interest rates that eventually will result in an economic slowdown. Though Gate’s warning of a slowdown falls short of a full-on recession prediction, Gates in an interview with CNN said, “I’m afraid the bears on this one have a pretty strong argument that concerns me a lot.”