Goldman Sachs, JPMorgan CEOs tip U.S. economy for recession as labor tightness keeps Fed aggressive

Goldman Sachs, JPMorgan CEOs tip U.S. economy for recession as labor tightness keeps Fed aggressive

CEO David Solomon and CEO Jamie Dimon both expect a U.S. recession as a tight labor market keeps the Federal Reserve on an aggressive monetary policy tightening trajectory. Speaking on a panel at the Future Initiative Investment conference in Riyadh, Saudi Arabia on Tuesday, Solomon said he expects economic conditions to "tighten meaningfully from here," and predicted that the Fed would continue raising interest rates until they reached 4.5%-4.75% before pausing. "But if they don't see real changes — labor is still very, very tight, they are obviously just playing with the demand side by tightening — but if they don't see real changes in behavior, my guess is they will go further," he said. "And I think generally when you find yourself in an economic scenario like this where inflation is embedded, it is very hard to get out of it without a real economic slowdown." The Fed funds rate is currently targeted between 3%-3.25%, but Federal Open Market Committee policymakers have signaled that further hikes will be needed, with . that the central bank's policy tightening to date had resulted in a "frankly disappointing lack of progress on curtailing inflation," projecting that rates would need to rise "well