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Wells Fargo CEO says the economy is not yet ready for a significant rate hike.

Charles Schaff

Qilai Shen | Bloomberg | Getty Images

Wells Fargo CEO Charles Schaff is betting on a “bigger rate hike” as the Federal Reserve is trying to curb high inflation, and the economy isn’t as prepared as it should be. Stated.

“I’m not betting on numbers, but I’m betting on a more important rate hike,” Schaff told CNBC’s Sara Eisen. Aspen Idea Festival On Wednesday, he added that raising the 50 and 75 basis points was considered “important in itself.”

“Will it be more? Maybe some changes to the data will be needed to see such things,” he said.

Federal Reserve Chairman Jerome Powell spoke at the European Central Bank forum Wednesday. Will not allow inflation to settle Of the US economy.

“The risk is to start moving to a higher inflation regime because of the diversity of shocks. Our job is to literally prevent it from happening, which is what the central bank leader said. I will prevent it from happening. ” “The transition from a low-inflation environment to a high-inflation environment is not allowed.”

These comments follow several rate hikes by the Fed in recent months, including the June 75 basis point hike, the largest since 1994.

“It’s very clear about how they’re trying to think about what the right move will be,” Schaff said, acknowledging the Fed’s work.

“When they started this, they did what they were trying to do, and they made it very clear that it was intended to continue,” he said.

But while consumers and small businesses are strong, Schaff said the effects of rising interest rates have not been factored into the economy as a whole.

“We know the price is going up, it couldn’t be clearer,” he said. “We know that consumers and businesses are strong today, but will get worse, and when that happens, we will act in amazement.”

“It doesn’t mean the world is nearing the end,” Schaff said, but “we should be aware of it and do our best to focus on what the solution is.” Added.

Markets and economies are not unaware of the situation and risks.The stock market is just over Worst first half since 1970.. Recent CNBC survey data from Main Street and US companies show widespread expectations for a recession. The latest CNBC | Momentive Small Business Survey shows: The majority of small business owners expect a recessionWhen There is no chief financial officer A recent response to the CNB CCFO Council’s survey stated that a recession was not expected.

Powell Told Congress on June 22 That inflation continues to get very hot and needs to go down. The consumer price index in May rose 8.6% year-on-year, the highest level since 1981.

“We’re looking for compelling evidence that inflation is declining, in line with inflation returning to 2% over the next few months,” Powell told Congress. “We expect continuous rate hikes to be appropriate. The pace of these changes will continue to depend on incoming data and the evolutionary outlook for the economy.”

“We are working harder than ever,” Schaff said. “The legislators, regulators and the Fed have extraordinary beliefs and extraordinary tools. Our ability to overcome anything.”

Disclosure: NBCUniversal News Group is a media partner of the Aspen Ideas Festival.

Wells Fargo CEO says the economy is not yet ready for a significant rate hike.

Source link Wells Fargo CEO says the economy is not yet ready for a significant rate hike.

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