David Bridges
Nearly every CEO expects a recession to the hit the U.S. in the next 12 to 18 months. Elon Musk and Jeff Bezos say it’s already too late to avoid one.
Brian Deese, top economic advisor to President Joe Biden, thinks the U.S. economy has enough “strength and resilience” to shield it from a recession, he told the Financial Times this weekend.
Deese, director of the White House’s National Economic Council, told the British newspaper:
“If we look at where the United States are, two things are clear. One is that we have a degree of strength and resilience in the labour market and household balance sheets and in business investment. That is continuing to move our economy forward, and that’s really important
“The second is that we are in a stronger position than … frankly, any other country to navigate through this transition without having to give up those gains.”
Recession warnings galore
His comments stand in stark contrast to a chorus of warnings and complaints from CEOs, top economists, and others that the U.S. is headed toward a recession.
Tesla CEO Elon Musk suggested this week that the U.S. is already in a recession—and it could last until the spring of 2024.
Amazon founder Jeff Bezos sounded an alarm on the economy this week, too, warning people to “batten down the hatches” amid stubbornly high inflation and continuing stock market volatility.
Meanwhile, 98% of CEOs are preparing for a U.S. recession in the next 12 to 18 months, according to the Measure of CEO Confidence survey recently released by the Conference Board.
Barry Sternlicht, the billionaire CEO of Starwood Capital Group, took it further this week in an interview with Fortune. He criticized the Fed for using “old data” to attack the economy with unnecessary interest rate hikes and argued the economy is “breaking hard” as borrowing costs soar—meaning a recession is now all but inevitable. What’s more, he said, Fed Chair Jerome Powell and his “merry band of lunatics” are destroying faith in capitalism and leading America toward “social unrest.”
Ken Griffin, CEO of hedge fund Citadel, has also warned about the deeper impact a recession could have. One so soon after the pandemic, he argues, could lead many Americans to believe the American dream is over.
“To be unemployed twice in such a short period of time, the diminution of job skills, career experience, derailment to future aspirations, a belief that the American dream is not achievable—those cultural and tangible impacts are really devastating,” Griffin said at the CNBC Delivering Alpha Investor Summit this month.
Economist Nouriel Roubini, meanwhile, believes a recession will hit the U.S. by year’s end—and that it will “severe, long, and ugly.”
Amid such warnings, optimistic messages from the White House can be jarring. Last weekend, Biden told reporters, “Our economy is strong as hell.”
Addressing complaints about the strong dollar hurting other economies, he replied, “The problem is the lack of economic growth and sound policy in other countries.”
Biden did acknowledge the possibility of a recession in a CNN interview earlier this month, saying, “I don’t think there will be a recession. If it is, it will be a very slight recession. That is, we’ll move down slightly.” He added later, “It is possible. Look, it’s possible. I don’t anticipate it.”
Sign up for the Fortune Features email list so you don’t miss our biggest features, exclusive interviews, and investigations.
Cameron Steel
Maya Kensington
