The Fed has been clear, but the economy still isn't ready for the big rate hikes ahead, Wells Fargo CEO says

cnbc.com:

Wells Fargo CEO Charles Scharf said he is betting on «more significant rate hikes» as the Federal Reserve tries to rein in high inflation, and that the economy is not as prepared as it should be.

«I wouldn't bet on a number, but I would bet on more significant rate hikes,» Scharf told CNBC's Sara Eisen at the Aspen Ideas Festival on Wednesday, adding that he considers 50 and 75 basis point hikes to be «significant themselves.»

«Is it going to be more than that? Maybe, but it would require some change in the data to see something like that,» he said.

Fed Chair Jerome Powell said Wednesday at a European Central Bank forum that he would not allow inflation to take hold of the U.S. economy.

«The risk is that because of the multiplicity of shocks you start to transition to a higher inflation regime. Our job is literally to prevent that from happening, and we will prevent that from happening,» the central bank leader said. «We will not allow a transition from a low-inflation environment into a high-inflation environment.»

Those comments follow several rate hikes from the Fed in recent months, including a 75 basis point hike in June that was its largest since 1994.

Scharf said that he gives the Fed credit for being «very clear about how they're going to think about what the right movements are going to be.»

«They've done as they started this what they said they were going to do, and they've been very clear that they intend for it to continue,» he said.

However, Scharf said that while the consumer and small businesses have been strong, the impact of rising rates has not been factored into the broader economy.

«We know rates are going up, it couldn't be clearer,» he said. «We know that consumers and businesses, while strong