pessimistic on economy
NEW YORK (AP) — The outlook for the U.S. economy from Wall Street’s biggest banks is getting gloomier, with many top executives saying they’re preparing for a potential downturn or a recession.
Following the short but potent pandemic recession in 2020, many bank CEOs have spent the past year and a half trumpeting the strength of the U.S. economy and the resilience of the U.S. consumer. Many did so again Friday after reporting their quarterly results, but this time with an overriding sense of caution.
“We recognize the pressure points are building in several areas of the economy that could lead to stress in the future,” said Andy Cecere, CEO of U.S. Bank.
Such comments reflect the growing evidence that the U.S. and global economy is weakening in the face of worldwide inflation and the war in Ukraine. On Tuesday, the International Monetary Fund lowered its forecast for 2023 global economic growth to 2.7% from 2.9%.
Half a dozen banks reported their quarterly results on Friday, ranging from behemoths JPMorgan Chase and Citigroup to super regional banks like U.S. Bank and PNC Financial. In calls with journalists and investors, bank executives painted a bifurcated picture of the economy.
On one hand, they noted a low level of delinquencies, solid consumer spending and healthy activity among their business clients. At the same time, they acknowledged multi-decade high levels of inflation, a housing market that is slowing down quickly, and a Federal Reserve that is raising rates at an unprecedented pace, which will make it more difficult for businesses to borrow.