Wall Street outlook on global economy sours
Top Wall Street bankers said they’re pessimistic about the outlook of the global economy next year with elections in the U.S., monetary policies and escalating Middle East tensions weighing on sentiment.
“If you take the time horizon, the monetary policies that we are going to see will have greater effects on the world, it’s difficult to be optimistic about that,” Bridgewater Associates founder Ray Dalio said during a panel on the first day of Saudi Arabia’s Future Investment Initiative. The upcoming U.S. elections will be about irreconcilable differences to do with wealth and power, he added.
Speaking alongside Dalio and JPMorgan & Chase Co. CEO Jamie Dimon, Citigroup Inc.’s Jane Fraser echoed those comments. “We’re sitting here with a backdrop of the terrorist attack in Israel and the events that have unfolded since, and it’s desperately sad,” she said. “So it’s hard not to be a little pessimistic.”
Meanwhile, BlackRock Inc. CEO Larry Fink said the Federal Reserve “is going to have to raise rates higher,” for longer, which means that by 2025 there may be either a soft or hard landing. In 2024, he doesn’t expect either, he said.
“This reminds me of the 70’s, the 70’s were about bad policy, today it’s about bad policy again, a big macro-shift,” Fink said. Although consumer power in the U.S. is comforting, other parts of the world like in Europe, are facing much more “severe headwinds.”
Executives have descended on Riyadh for this year’s investment summit despite growing tensions between Israel and Hamas, which is designated a terrorist group by the US and Europe. French President Emmanuel Macron became the latest world leader to visit Israel, where he’ll meet Prime Minister Benjamin Netanyahu and is expected to call for
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