Jeff Bezos has stated that a US recession is looming, and advised consumers and businesses to stockpile cash in the event of a dramatic downturn.
“The economy does not look great right now,” Amazon’s billionaire founder and executive chairman told CNN in an interview.
“Things are slowing down, you’re seeing layoffs in many, many sectors of the economy,” he went on to say. “The probabilities say if we’re not in a recession right now, we’re likely to be in one very soon.”
Mr Bezos recommended American households delay major purchases such as new televisions, refrigerators, and cars, given the risk of a further economic dip. Similarly, he suggested small-business owners consider holding off on investments in new equipment, and instead focus on their cash reserves.
The e-commerce pioneer opted against predicting how long the recession could last, but he emphasised that the public should be ready for an economic disaster.
“Take as much risk off the table as you can,” he said. “Hope for the best, but prepare for the worst.”
Bezos’ latest comments echo his response to Goldman Sachs CEO David Solomon in October, when the bank chief said there is a good chance of a US recession.
“Yep, the probabilities in this economy tell you to batten down the hatches,” Bezos tweeted at the time.
Andy Jassy, who succeeded Bezos as Amazon’s CEO last summer, appears to share his predecessor’s recession fears. Amazon has been cutting costs, slowing spending, and postponing hiring for certain roles in recent months.
Central bank’s concerns
Leading investors, executives, academics, and analysts have also expressed concerns this year. They have pointed to the Federal Reserve’s efforts to combat inflation, which surged to a 40-year high of 9.1 percent in June, and remained at 7.7 percent in October.
The US central bank is rushing to cool the economy and alleviate upward pressure on prices by raising interest rates. It has hiked them from nearly zero in March to a range of 3.75 percent to 4 percent today, and indicated they could peak above 5 percent for the first time since 2007.
The upshot is that American consumers and businesses may have to weather soaring prices, surging borrowing costs, and a shrinking economy.
Economists have highlighted that much of this is a fallout of the draconian COVID-19 measures which drastically slowed most sectors of the economy, the results of which the public are now starting to feel
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