US banks concerned about rising inflation-Budrigantrade Review
Budrigantrade.com - On Tuesday, executives of American banks expressed concerns regarding the consequences of a prolonged period of higher inflation, adding to the pressure placed on the Federal Reserve to accelerate plans to slow the rate at which it purchases assets.
During a conference, Chief Executive Officer Charlie Scharf stated that the Federal Reserve may need to act more quickly to address inflation concerns. David Solomon, the CEO of Goldman Sachs (GS.N), stated that he anticipated a period of higher inflation.
Last week, the International Monetary Fund issued a warning about rising inflationary pressures, particularly in the United States, and suggested that central bankers in the United States should pay more attention to inflation risks.
Speaking at the Goldman Sachs Financial Services Conference, Scharf stated, "There's a case to be made that they (the Federal Reserve) should be moving faster than they've been moving."
He stated, "Inflation is very, very real." Input costs are significantly more expensive in most industries. Work lack and compensation increments are very genuine. It doesn't really matter if that continues for several years, but it will certainly affect the next year or so.
Last week, Federal Reserve Chair Jerome Powell stated that the Fed needs to be prepared to respond to the possibility that inflation may not decrease in the second half of next year as most forecasters currently anticipate.
Scharf stated, "My guess is now that there will be a faster path to appropriate actions."
In an interview with CNBC, Solomon of Goldman Sachs stated that while he anticipates that inflation will rise for some time, he does not anticipate a reoccurrence of the 1970s price increases.
He stated, "There's a reasonable chance that we'll have inflation above trend for a period of time, but that doesn't mean it has to be like the 1970s." You must exercise caution and prudent risk management."
Solomon acknowledged "uncertainty" in global financial markets as a result of factors such as the Omicron COVID-19 variant and uncertainty regarding the Fed's and other central banks' rate of asset purchase reduction.
"The pandemic has not completely left us out. That creates uncertainty, and that uncertainty will have an impact on economic activity," he stated.
"In addition, we are attempting to balance that with shifts in fiscal and monetary policy." Since this has undoubtedly been an unprecedented period, it is extremely difficult to anticipate how we will recover."
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