Wells Fargo’s CEO and president has become the latest high-profile corporate figure to predict that the U.S. is heading toward a recession.
Speaking at the Wall Street Journal’s Future of Everything Festival on Tuesday, Charlie Scharf, who heads up the bank, said there was “no question” the U.S. was heading for an economic downturn of some kind.
“I think it’s going to be hard to avoid some kind of recession,” he told the conference.
“But I also get the fact that everyone is so strong going into this, [which] should hopefully provide a cushion so that whatever recession there is, if there is one, is short and not all that deep,” Scharf added, referring to the strength of consumer demand and business activity.
A recession is typically categorized by a decline in GDP over two successive quarters.
The National Bureau of Economic Research, which defines a recession as a significant decline in economic activity that is spread across the economy and lasts more than a few months, considers several areas of economic activity as potential recession signifiers, including real personal income, nonfarm payroll employment, and industrial production.
The U.S. economy shrank by 1.4% in the first quarter of this year, despite steady consumer spending.
Scharf joins the ranks of several market watchers who are predicting a recession is looming for the United States.
Goldman Sachs’ senior chairman Lloyd Blankfein said last week that he believed there was a “very, very high risk” the American economy will soon slump into a recession.
German lender Deutsche Bankpredicted in April that there will be “a major recession,” while a top Morgan Stanley strategist warned this week that the “risk of a recession has gone up materially.”