Former Goldman Sachs chief executive Lloyd Blankfein said on Sunday he believed the economy was in danger of collapsing, as the US Federal Reserve continued to raise interest rates to offset inflation.Speaking on “Face the Nation” on CBS, Blankfein said the recession was “a very dangerous factor.”
“There is a way. It’s a narrow path, ”said Blankfein, who retired from Goldman Sachs a few years ago and holds the title of chairman.“But I think the Fed has very powerful tools. It’s hard to tune them right, and it’s hard to see their results quickly enough to change them, but I think they respond well. It’s very dangerous. ”
Last week, Federal Reserve Chairman Jerome Powell acknowledged that rising interest rates “would include some pain,” but added that the worst effect would be inflation.In March, the Fed approved a quarter-point increase. But some analysts say they fear that policymakers are far behind in curbing inflation without the kind of sharp inflation that could lead to a recession.
Blankfein told CBS that he agreed with Powell’s assessment, saying that some of the effects of the current economic downturn would “stick.””It’s all about the individual, and certainly for the people under the quartile … sharing pies, is going to be very difficult and stressful,” he said.
Blankfein served as CEO at Goldman Sachs from 2006 to 2018, a period of dominance that included a financial crisis that led to the US government launching a bank bailout program.