Add Citigroup CEO Jane Fraser to the rising record of financial institution CEOs who’re warning about powerful instances forward.
Whereas Fraser doesn’t “see a drastic downturn on the horizon,” the pinnacle of the third-largest financial institution in america does see a recession coming, she mentioned in ready remarks launched by the Senate Banking Committee on Tuesday forward of an annual listening to on Wall Avenue oversight on Wednesday.
That recession may consequence due to elements together with “persistent inflation in companies, rising debt [levels], a slowdown in world development and two main conflicts in Europe and the Center East.”
On the buyer spending facet, Fraser warned lawmakers that Citi knowledge suggests persons are pulling again extra. That aligns with latest authorities consumer spending data. On the identical time, prospects who fall within the lowest band of credit score scores are taking up the very best ranges of debt since 2019, Fraser is ready to say.
Financial institution of America CEO Brian Moynihan didn’t embrace his ideas on the financial outlook in his ready remarks. Nonetheless, he mentioned that “the way in which customers are spending cash is leveling out,” in an interview with CNBC on Tuesday. “However all in all [consumers are in] fairly respectable form.”
He additionally steered that the Federal Reserve is within the midst of pulling off a mushy touchdown — that’s, getting inflation underneath management and not using a vital spike within the unemployment charge.
JPMorgan Chase CEO Jamie Dimon urged Individuals to prepare for a recession final week.
“A number of issues on the market are harmful and inflationary. Be ready,” he mentioned on the 2023 New York Instances DealBook Summit in New York. “Rates of interest might go up and that may result in recession.”
Within the remarks for the listening to on Wednesday Fraser publicly acknowledged for the primary time a Consumer Financial Protection Bureau investigation alleging the financial institution illegally discriminated in opposition to Armenian Individuals for years by singling them out on bank card purposes primarily based on their surnames.
“We’re deeply sorry and apologize to the Armenian American group that we just lately fell wanting our honest lending expectations,” Fraser mentioned in her ready remarks, including that Citi has “taken motion to make issues proper and stop any recurrence.”
Along with Dimon, Fraser and Moynihan, lawmakers will hear testimony from the CEOs of Wells Fargo, State Avenue, BNY Mellon, Goldman Sachs and Morgan Stanley.