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Inflation, interest rates, Ukraine war
: Goldman Sachs banker
John Waldron
warns of turbulence
Photo: MIKE BLAKE / REUTERS
Alarm is on Wall Street.
The top bankers in the US are apparently slowly becoming uneasy when they look at economic developments.
JPMorgan boss
Jamie Dimon
(66) had already warned of an approaching "hurricane" on Wednesday.
"The hurricane is out there and it's coming at us," said the CEO of the largest bank in the United States in view of a looming recession.
Just a day later, the second-highest manager at rival Goldman Sachs expressed at least similar alarm.
The global economy is being hit by a series of shocks at once, warned President and Chief Operating Officer
John Waldron
(50).
"This is one of the most complex, if arguably the most complex and dynamic environment I have ever encountered in my career," Waldron said at an investor conference.
"The combination of the many shocks that are shaking the system is unprecedented for me."
While he wanted to avoid "any weather analogies," he said, the risks of inflation, changes in monetary policy and the Russian invasion of Ukraine could plunge the global economy into crisis.
Waldron is the second highest paid manager at Goldman Sachs, behind bank boss
David Solomon
(60), with more than $35 million in total compensation for 2021. Prior to his current position, he held senior positions in the bank's investment banking for many years.
Already at the beginning of the year he appeared as one of the harshest critics of the course of the US Federal Reserve.
In his opinion, the monetary authorities had not reacted decisively enough to the highest inflation in 40 years.
Inflation in the USA is now at 8.3 percent and in the euro zone at 8.1 percent.
The Fed has already initiated a radical turnaround in interest rates for the USA;
the European Central Bank has announced its move, and the next Council meeting will take place next week.
So far, many companies have been able to pass on rising costs to consumers, said
Jane Fraser
(54), CEO of Citigroup, at a conference with professional investors.
"The only question is: how much longer?"
The CEO of the fourth largest US bank already feels reminded of the wild stock market storms of the 1970s.
Companies and investors should prepare for a wild phase, advises Goldman manager Waldron.
"We expect tougher economic times ahead," said the veteran investment banker.
"There is no question that we will see a more difficult environment for the capital markets."
Nor is he the only Goldman banker sounding the alarm.
CEO Solomon had already expressed concern in mid-May.
"There is a chance of a recession," he said in an interview with Bloomberg news agency.
His economists have calculated a 30 percent chance that something like this could happen in the next twelve to 24 months.
"We absolutely have to get rid of inflation."
The situation is becoming extremely painful, especially for the lower income brackets.
And Solomon's predecessor, Goldman's ex-boss
Lloyd Blankfein
(67), was already concerned two weeks ago.
There is currently a “very, very high risk”.
"If I were running a business, I would prepare myself very carefully."
And even if he were an investor.
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