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Charles Platiau/Reuters
- Mark Zuckerberg, Andy Jassy and Larry Fink issued grim warnings about the US economic system on Wednesday.
- Meta and Amazon chiefs plan to cut costs, while BlackRock chief expects flat rise.
- Treasury Secretary Janet Yellen noted that the United States is in good shape and can still avoid a recession.
Mark Zuckerberg, Andy Jassy and Larry Fink issued grim outlooks for the US economic climate at the DealBook Summit on Wednesday.
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The CEOs of Meta and Amazon promised to reduce prices and control their opportunities against a backdrop of slowing growth, persistent inflation and rising hobby prices.
BlackRock's CEO anticipated higher valuations and faster rate hikes in the coming years. He also warned that authorities could be undermined by their previous interventions, leaving them unable to rescue their savings this time.
Treasury Secretary Janet Yellen also signaled a decline in U.S. growth but said the economy could still escape a recession.
1. Mark Zuckerberg, CEO of Meta Systems
“We thought the financial system and business were heading in an undeniable direction, and it clearly hasn't gone from that path,” said the head of Facebook, Instagram and WhatsApp's parent company. “Now we need to pull it back.”
“Our operational center of attention in the coming years will be efficiency, discipline and rigor, and just working in a much tougher environment,” Zuckerberg persevered, adding that the US appears to be in more desirable economic shape than Europe. .
2. Andy Jassy, CEO of Amazon
“This time last year, it felt like we were coming out of the pandemic,” Jassy said. “Then Omicron came along, and the war in Ukraine happened, and the inflationary atmosphere we're in came up, and now a very unclear financial system.”
Jassy, who succeeded Amazon founder Jeff Bezos as CEO last year, said shoppers are hungry for bargains and are trading up to more economical models of TVs and other electronics as opposed to a backdrop of rising costs and loan rates.
“They are spending, but they can be careful about trying to stretch their dollars,” he noted, adding that customers gravitate toward companies that treat them well in “elaborate and insecure economies.”
Jassy said he plans to simplify Amazon's cost base without giving up on long-term bets that could pay off big for the e-commerce and cloud computing titan.
“Over the next 12 or 2 months, the economy will look at the long period of disintegration of many agencies,” he said.
three. Larry Fink, CEO of BlackRock
The Federal Reserve has raised interest rates from near zero to about 4% this year in order to curb old inflation. The U.S. economy could face higher charges and larger annual expense increases in the coming years, Fink pointed out.
“We will basically have higher tariffs, they will no longer fall”, commented the head of BlackRock, suggesting that prices should be around 2% to 3%, and inflation around 3% to 4%.
“At the same time, we simply won’t have an economic climate that is actually based on real growth,” he persisted, pointing to Europe’s energy disaster and China’s slowing economy as current headwinds. “We are going to enter a period of more than what I would call malaise.”
Fink also highlighted the sharp declines in stocks and bonds this year, and the sharp rise in the US dollar, as facts of a “total industry reset.”
Additionally, he said executives' bills had ballooned and predicted it would take years for crucial banks to scale back all the stimulus they had provided in recent years. This could mean they are hesitant to stimulate their savings in the coming years.
4. Janet Yellen, Secretary of the Treasury and former chair of the Federal Reserve
“The American financial system is slowing down, but it is functioning at a very good stage,” Yellen noted. “buyers are in good shape, their funds are adequate. The banks are in an adequate state.”
“It would actually be possible to have a soft landing,” she said, regarding results in which the Fed manages to crush inflation without triggering a recession.
