Jeff Bezos said a US recession is looming and advised consumers and businesses to hoard cash in the event of a dramatic downturn.
“The economy isn’t looking great right now,” Amazon’s billionaire founder and executive chairman told CNN in an interview.
“Things are slowing down, you’re seeing layoffs in so many sectors of the economy,” he continued. “The odds say that if we’re not in a recession right now, we’ll probably be there very soon.”
Mr. Bezos recommended that American households delay major purchases such as new televisions, refrigerators and cars, given the risk of another economic downturn. Likewise, he suggested small business owners consider pausing investments in new equipment and instead focus on their cash reserves.
The e-commerce pioneer opted not to predict how long the recession might last, but he stressed that the public needed to be prepared for an economic catastrophe.
“Take as many risks 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’s chief said there was a good chance of a recession in the United States. “Yes, the odds in this economy are telling you to batten down the hatches,” Bezos tweeted at the time.
Andy Jassy, who took over from Bezos as Amazon CEO last summer, appears to share his predecessor’s recession fears. Amazon has cut costs, slowed spending and postponed hiring for some positions in recent months.
Central bank concerns
Leading investors, executives, academics and analysts have also expressed concerns this year. They pointed to the Federal Reserve’s efforts to fight inflation, which hit a 40-year high of 9.1% in June and remained at 7.7% in October.
The US central bank is rushing to cool the economy and ease upward pressure on prices by raising interest rates. He took them from near zero in March to a range of 3.75% to 4% today, and signaled they could peak above 5% for the first time since 2007.
The result is that American consumers and businesses may have to deal with soaring prices, soaring borrowing costs and a shrinking economy.
Economists have pointed out that much of this is a consequence of the draconian COVID-19 measures that have significantly slowed most sectors of the economy, the results of which the public is now beginning to feel.