Citigroup CEO Jane Fraser says she is convinced Europe is headed into a recession.
Speaking at the World Economic Forum Monday, Fraser said that a plethora of factors, including the war in Ukraine and the resulting energy crisis, have made Europe vulnerable to an economic downturn.
“Europe is right in the middle of the storms from supply chains, from the energy crisis, and obviously just the proximity to some of the atrocities that are occurring in Ukraine,” she told Geoff Cutmore.
When asked if the factors played a role in forming her conviction, Fraser said: “Yes.”
European energy costs have soared in recent months amid Russian sanctions, while a broader surge in inflation is fueling a cost-of-living crisis.
The prediction she made in October 2021 of a “brutal winter” for markets proved largely accurate, with stock markets embarking on a major sell-off in early 2022 with losses extending to today.
The U.S., which has so far demonstrated “more resiliency” in the economy, the labor market and among consumers, may yet suffer a recession, Fraser said. However, the Federal Reserve’s rate-hiking strategy as inflation soars ever higher will determine the outcomes.
