Global Recession Reality Check: ‘The Worst Is Yet To Come’ Opine Top 7 World Economists

Global Recession Reality Check: If the global markets are any parameter to go by, then it is not painting a rosy picture given the confusion and uncertainty both Bulls and Bears are going through. Also, the most prominent business agencies of the world are advising caution as well as warning that the economic meltdown is just around the corner. This holds more water given that Credit Suisse shares plunged to new lows just five days back, spurring swelling fears and even suggestions that the bank could face a “Lehman Brothers moment”. Add to it the studies undertaken by some of the world’s top business leaders and economic minds, and their outcomes.Also Read – Truck Bomb Damages Key Bridge To Crimea, Says Russia

Central banks globally, including the Federal Reserve, have aggressively hiked interest rates in recent months to try and slow down exorbitant inflation. While these policies are intended to cool down the economy, they also elevate the risk of a recession. Also Read – Vladimir Putin’s Nuclear Threats Are No Joke, Warns Joe Biden, Compares Situation To ‘Armageddon’

The past few months have witnessed heated debates on whether we are rushing towards a rerun of 2008 with around 90% of CEOs saying that they now believe a slump is on the way, according to a survey of 400 U.S. CEOs by consulting firm KPMG, as reported by fortune.com. Also Read – IMF Says Tightening Actions By Central Banks Will Prevent High Inflation From Becoming Entrenched

To cut it short right here, let’s hear some of the most prominent takes.

1. Jamie Dimon, JPMorgan Chase CEO

Economic turbulence and market volatility were raised by Jamie Dimon in May and he warned investors about the economic perils of the Russian invasion of Ukraine. Well, somehow, he hit the bull’s eye with the Fed going for tighter monetary policy.

In the words of JPMorgan Chase CEO: After a previous forecast of storm clouds, big storm clouds, those clouds had turned into a hurricane. We don’t know if it’s a minor one or Superstorm Sandy. You better brace yourself,” he said in June and sticks to his stance in October. He acknowledged a client’s call in September that while the US economy is strong overall, he sees only a 10% chance of an economic slowdown that doesn’t lead to a recession.

“The remaining outcome could amount to maybe something worse,” said Dimon.

2. Carl Icahn, chairman of Icahn Enterprises

“Inflation is a terrible thing. You can’t cure it,” warned Carl Icahn.

“The worst is yet to come,” warned billionaire investor Carl Icahn in regard to stocks’ performance for the rest of the year while speaking at the Best New Ideas in Money Festival last month, as reported by fortune.com.

Carl Icahn repeatedly warned investors of impending difficulty for the US economy, blaming the Fed for switching from its quantitative easing policy and near-zero interest rates during the pandemic to a tighter monetary policy focused on fighting inflation.

“We printed up too much money, and just thought the party would never end,” he told MarketWatch at the festival. “The party’s over.”

3. Ken Griffin, Citadel CEO

Ken Griffin thinks there will be a recession, reports fortune.com.

But unlike some investors and economists, who have scorned Federal Reserve officials for their hawkish attempts to cool the economy, the Citadel CEO says the central bank should continue its fight, even after its recent series of big rate hikes.

“Everybody likes to forecast recessions, and there will be one. It’s just a question of when, and frankly, how hard,” Griffin said last week at the CNBC Delivering Alpha Investor Summit.

4. Nouriel Roubini, Economist, New York University Professor, and CEO of Roubini Macro Associates

Economist Nouriel Roubini says recession could strike the US by the end of 2022 before spreading globally next year with the potential to last for the entirety of 2023.

“It’s not going to be a short and shallow recession; it’s going to be severe, long, and ugly,” Roubini said during an interview with Bloomberg in September.

The Professor earned himself the nickname “Dr Doom” for being one of the first to correctly predict the 2007–08 crash. Roubini said he expects “a real hard landing” in which the S&P 500 could fall 40%.

5. Kristalina Georgieva, IMF managing director

International Monetary Fund managing director Kristalina Georgieva says, “Even if the global economy technically skirts a downturn, the effects could still feel like a recession.” In a September interview with Bloomberg, Georgieva said increased interest rates will “bite,” negatively impacting growth.

“For hundreds of millions of people it will feel like a recession, so buckle up.”

6. David Malpass, World Bank president

World Bank president David Malpass, during a speech at Stanford University last week, warned that a “perfect storm” of rising interest rates, high inflation, and slowing growth could help trigger a global recession.

“A tough reality confronts the global economy—and especially the developing world. A series of harsh events and unprecedented macroeconomic policies are threatening to throw development into crisis,” Malpass said. “This has consequences for all of us due to the interlinked nature of the global economy and civilizations around the world.”

In early September, the World Bank issued a study predicting a global recession as early as next year.

7. Ngozi Okonjo-Iweala, WTO director-general

The World Trade Organization (WTO) has also painted a grim picture of a global recession. “The indicators are not looking good,” WTO director-general Ngozi Okonjo-Iweala told Bloomberg last week. “I think a global recession—that is what I think we are edging into.”

According to Okonjo-Iweala, “The combination of rising food and energy prices, and the ongoing effects of Russia’s war in Ukraine are threatening countries worldwide with an economic downturn.