U.S. bank executives predict an economic downturn and the Federal Reserve has announced the highest possible interest rate.

 

U.S. bank executives predict an economic downturn and the Federal Reserve has announced the highest possible interest rate.
U.S. bank executives predict an economic downturn and the Federal Reserve has announced the highest possible interest rate.


U.S. bank executives predict an economic downturn and the Federal Reserve has announced the highest possible interest rate.

Today, many US companies and institutions released their earnings reports, with Bank of America (NYSE:BAC) and Goldman Sachs (NYSE:GS) standing out in particular.


Statements from major bank leaders.

David Solomon, the president of Goldman Sachs, reported that the bank had a negative earnings report for the first quarter. Nonetheless, he stated that volatility in the banking sector is now over and warned of potential credit issues caused by Silicon Valley's crisis.

The CEO of Bank of America stated that the US is heading towards a recession this year, as the indicators show a decrease in inflation.


The Federal Reserve has made new statements.

Fed Reserve member Bostick told CNBC that he plans to raise interest rates due to the current economic momentum, noting that inflation is still high.

Bostick suggested that the Federal Reserve should raise interest rates to 5.25% and maintain them at that level. He predicted it would take some time for inflation to decrease to the 2% target when interest rates are kept steady at 5.25%.

Bostick and Federal Reserve member James Bullard both agree that there is no need to expect a recession in the future. Bullard had previously suggested raising interest rates by 50 basis points. Bostick believes that a slowdown of the economy is required to help reduce inflation effectively and truly.

Bostick expressed his confidence in the banking sector, citing its strength and stability since the last crisis. He also commented on the US debt ceiling issue, highlighting its negative impact on the economy.


What's happening in the markets now?

Gold regained some of its value, with futures contracts increasing by 0.79% to 2022.75 dollars an ounce and spot contracts rising 0.77% to 2010.54 dollars an ounce.

The US dollar index declined by 0.33%, while the euro strengthened against the dollar by 0.37%. The Central Bank has indicated that it may increase interest rates in May and Goldman Sachs raised its peak rate in Europe to 3.75% from 3.50%.

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