Fear of recession grips US bank executives.
The senior executives of the financial giants, who made statements in the US yesterday, affirmed that they will resort to salary cuts and layoffs and that they expect a recession in 2023.
The perception of risk in the markets increased with the declarations of the directors. US stock markets lost value on concerns that the US Federal Reserve (Fed) would continue its tight policies.
WALL STREET GIANTS BLESSED
Goldman Sachs CEO David Solomon said he expects pay cuts and layoffs, and that tough times are ahead.
The CEO of Bank of America, Brian Moynihan, announced that they will reduce employment in the face of economic adjustment.
JP Morgan CEO Jamie Dimon also said a moderate to harsh recession can be expected in 2023.
Warnings from the CEO of 3 Wall Street giants about employment and recession increased tension in the markets. The assessments of the CEOs were summarized as follows:
GOLDMAN SACHS
Goldman Sachs Chief Executive Solomon was pessimistic about the economic outlook. Solomon said the pay cuts and possible layoffs would not come as a surprise.
Speaking to Bloomberg television yesterday, Solomon said: “You have to assume there are ups and downs ahead. You have to be a little more careful with your financial resources,” he said.
This may mean a greater focus on the bank’s current costs and a slowdown in hiring. “This can also mean contraction at certain points,” Solomon said.
J.P. MORGAN
“Inflation is eroding everything and the savings from the incentives will dry up by the middle of next year,” said Dimon, chief executive of JP Morgan.
“Looking forward, these kinds of things could very well derail the economy and cause a mild or hard recession that worries people,” Dimon said.
BANK OF AMERICA
Bank of America CEO Moynihan said he saw signs of sluggishness on the consumer side as spending began to slow. Speaking about the recession and inflation in the US, Moynihan stated that layoffs are possible.
After the explanations, the S&P500 index closed the day at $3,941 with a depreciation of 1.44 percent. While the Dow Jones index ended the day at 33,596 points with a depreciation of 1.03 percent, the Nasdaq index ended the day at 11,014 points with a depreciation of 2 percent.