Morgan Stanley CEO says inflation has reached its peak and China had reached an important turning point - Economics
Morgan Stanley CEO says inflation has reached its peak and China had reached an important turning point - Economics
James Gorman, CEO of Morgan Stanley, says that two changes have been taking place lately that are "really important" for the economy. The executive explained that inflation had clearly reached its peak and that China had economically made a "large, big linchpin".
CEO of Morgan Stanley about US economy and inflation
The chairman and CEO of global investment bank Morgan Stanley, James Gorman, spoke in an interview with CNBC on Thursday in Davos, Switzerland, about the US economy and China's relationship with the USA.
"Lately two things have changed that are really important," he began, and found that the first affects inflation while the second concerns the recent economic turning point of China.
"The number of inflation is better," said the Morgan Stanley boss and emphasized:
Inflation clearly reached its climax. That is no longer a question. It's a fact.
he added that the question was whether the Federal Reserve could achieve its inflation goal of 2 % and "how much it would try to reach 2 % instead of stabilizing around 3 %, 4 %".
In terms of interest rate increases of the Fed, Gorman pointed out: "We were on a 75-basis path. We quickly rose to 50." At the next meeting of the Federal Open Market Committee (FOMC), he expects the Fed to increase the interest by 25 basis points, and explains: "I could see 25, followed by 25, followed by a break. I think that is not indplenant."
"China made a big, big linchpin"
Gorman said that another important change that has recently taken place concerns China. He described:
The second thing that happened is that China has made a large, large linchpin. Now the focus was on the obviously critical reopening.
"The recent economic turn, the thawing of relationships with the USA, the meeting ... with the Vice Prime Minister and Foreign Minister Yellen - that's a big deal," continued the CEO of Morgan Stanley.
US finance minister Janet Yellen met China's Vice Prime Minister Liu He on Wednesday, "as part of the efforts to deepen and work together to deal with global challenges," said the finance ministry last week. In November last year, President Joe Biden and President Xi Jinping also met in Bali and "agreed to authorize high -ranking key officials to deal with these issues," the Ministry of Finance continued.
"According to President Xis Mantra of the common prosperity, there are two ways to achieve this," Gorman concluded:
on the one hand by redistribution of the existing prosperity so that everyone gets a piece of the cake. The other is to enlarge the cake so that everyone gets a piece of the cake. I think you have developed from the former to the latter. This is good news for global growth.
do you match with James Gorman, CEO of Morgan Stanley, with regard to inflation and China's pivotization? Let us know in the comment area below.
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