Morgan Stanley CEO Issues Dire Warning For US Economy

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Sarah Weaver Staff Writer
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Morgan Stanley’s CEO James Gorman said he believes there is a 50% chance the U.S. economy is entering a recession at a conference Monday.

“It’s possible we go into recession, obviously, probably 50-50 odds now,” Gorman said at a conference hosted by Morgan Stanley, according to Reuters. “I don’t think we’re falling into some massive hole over the next few years, I think eventually the fed will get hold of inflation,” he went on to say. “You know it’s going to be bumpy; people’s 401(k) plans are going to be down this year.”

However, Gorman said if the U.S. were to fall into a recession, it would not be “deep and long.”

Consumer prices are at their highest rates in the last 40 years. The Consumer Price Index rose by 8.6% over the last year. (RELATED: JAHANI: The Fed Is Caught Between A Crash And A Recession. Either Way, The Poor Lose Out)

Sales of new homes fell by 16.6% in April and interest rates have risen to 5.25%, up from 3.1% at the start of the year.

BlackRock President Rob Kapito said in March that an “entitled generation” was about to learn what it meant to deal with shortages.

“For the first time, this generation is going to go into a store and not be able to get what they want,” Kapito said.

U.S. Treasury Secretary Janet Yellen, however, has still denied that America is entering a recession, saying June 9, “I don’t think we’re going to have a recession.”