- Jeff Bezos said the US economy faces a significant risk of recession.
- The billionaire Amazon founder advised people to prepare for a difficult downturn.
- Bezos called inflation a critical issue to solve earlier this year.
Jeff Bezos has warned that the US economy could be headed for a recession and advised Americans to prepare for a painful downturn.
Amazon’s billionaire founder and CEO retweeted a CNBC clip by Goldman Sachs CEO David Solomon on Tuesday. In it, the bank chief advised business owners to be cautious and prepare for more market volatility as growth headwinds mount.
“The way the results are distributed, there’s a good chance we could have a recession in the United States,” Solomon said.
“Yes, the odds in this economy are telling you to shut the hatches,” Bezos tweeted in response.
Recession fears have been growing in recent months, in part as the Federal Reserve is actively trying to cool the US economy. The central bank’s goal is to bring down inflation, which rose to a 40-year high of 9.1% in June and stayed above 8% in September.
The Fed has hiked interest rates from virtually zero in March to a range of 3% to 3.25% today, signaling that they could approach 5% next year. Higher interest rates encourage consumers to save rather than spend or invest and make borrowing more expensive, so they tend to reduce aggregate demand and ease upward pressure on prices.
Leading investors, executives, academics and analysts have also sounded the alarm about a possible global recession. They have cited a range of risks, including huge amounts of private and public debt and Russia’s invasion of Ukraine, which continues to disrupt food, fuel and commodity markets.
Bezos is well-placed to comment on the US economy as Amazon is one of the largest employers in the country with 1.5 million full-time and part-time employees as of June 30. The online retailer and cloud computing titan also commands a $1.2 trillion market capitalization and posted $470 billion in net sales last year, making it a major player in the stock market and economy power.
Amazon CEO Andy Jassy, who took over from Bezos last summer, appears to share his predecessor’s concerns. Amazon has cut costs, slowed spending and frozen hiring for certain positions in recent months, suggesting it expects a tougher economic environment.
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