Good for gold! Morgan Stanley CEO warns of rising chances of U.S. recession

On June 14, Morgan Stanley Chief Executive James Gorman said the likelihood of a recession may be rising as the Fed wrestles with inflation, but it is unlikely to be a severe recession.



Gorman said at a financial conference at his New York-based bank that day: "It's clear that we have a chance of entering a recession, and the odds are now 50 to 50 percent." That's up from his earlier forecast of 30 percent. %. "We are unlikely to be in a deep or prolonged recession at this stage," he added.

Gorman's comments come as markets are in free fall, with expectations that central banks will need to aggressively fight inflation. Bank executives have recently issued a warning about the economic situation as the Federal Reserve raised interest rates and scrapped its quantitative easing program. Dimon, chief executive of its rival, said he expected a "hurricane" ahead because of the conflict between central banks and Ukraine.

But Gorman said he believes the Fed will eventually be able to pull inflation down from multi-decade highs.

"I don't think we're going to be in some kind of huge hole in the next few years, and I think the Fed will eventually get inflation under control," he said.

He said he was relieved that the fundamentals of the economy, including consumer and business balance sheets, were better than the market was showing, even though the market had been collapsing.

However, Gorman said the Fed has been raising rates for too long, leaving less room to maneuver once the economy begins to decline. He said he began discussing the risk of a recession with an internal committee in August or September last year, when inflation persisted significantly more than expected.

"We're in a 'Brave New World' now, and I don't think anyone in this room can accurately predict what inflation will be a year from now," he added.

Based on the above news, it can be seen that Morgan Stanley predicts that the possibility of the US economy falling into recession is higher, which may boost the price of gold, but it is unlikely to fall into a serious recession, so the space to boost the price of gold may be limited.



(Spot gold daily chart)

At 9:39 GMT+8 on June 14, spot gold was quoted at $1,824.49 per ounce.