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Mark Zuckerberg, Andy Jassy, and Larry Fink just rang the alarm on the US economy. Here's what they warned about the coming downturn.

Mark Zuckerberg
Mark Zuckerberg.Charles Platiau/Reuters
  • Mark Zuckerberg, Andy Jassy, and Larry Fink issued bleak warnings about the US economy on Wednesday.

  • The Meta and Amazon bosses plan to cut costs, while the BlackRock chief expects stagnant growth.

  • Treasury Secretary Janet Yellen said the US is in good shape and might still avoid a recession.

Mark Zuckerberg, Andy Jassy, and Larry Fink issued grim outlooks for the US economy at the DealBook Summit on Wednesday.

The Meta and Amazon CEOs vowed to cut costs and rein in their risk taking against a backdrop of slowing growth, stubborn inflation, and surging interest rates.

BlackRock's CEO predicted higher rates and faster price increases for years to come. He also warned authorities might be hamstrung by their previous interventions, leaving them unable to bail out their economies this time around.

Treasury Secretary Janet Yellen also flagged declining US growth, but suggested the economy might still escape a recession.

Here's a roundup of their key comments, lightly edited for length and clarity:

1. Mark Zuckerberg, CEO of Meta Platforms

"We thought that the economy and the business were going to go in a certain direction, and obviously it hasn't turned out that way," the boss of Facebook, Instagram, and WhatsApp's parent company said. "We've had to pull back."

"Our operational focus over the next few years is going to be on efficiency and discipline and rigor, and just operating in a much tighter environment," Zuckerberg continued, adding that the US appears to be in better economic shape than Europe.


2. Andy Jassy, CEO of Amazon

"This time last year, it looked like we were coming out of the pandemic," Jassy said. "Then Omicron happened, and the war in Ukraine happened, and the inflationary environment that we're in happened, and now a very uncertain economy."

Jassy, who succeeded Amazon founder Jeff Bezos as CEO last year, noted that shoppers are hungry for bargains and have been trading down to cheaper models of TVs and other electronics, against a backdrop of rising prices and borrowing costs.

"They're spending but they're being careful about trying to stretch their dollars," he said, adding that consumers gravitate to companies that treat them well in "difficult and uncertain economies."

Jassy said he plans to streamline Amazon's cost base without giving up on long-term bets that could pay off big for the e-commerce and cloud-computing titan.

"This next year or two, the economy is going to test the long-term resolve of a lot of companies," he said.


3. Larry Fink, CEO of BlackRock

The Federal Reserve has hiked interest rates from near zero to about 4% this year in an effort to curb historic inflation. The US economy could face both higher rates and larger annual price increases for years to come, Fink said.

"We're going to have rates fundamentally higher, they're not going to go down," the BlackRock chief said, suggesting rates could stay around 2% to 3%, and inflation around 3% to 4%.

"At the same time, we're just not going to have an economy that is based on a real growth," he continued, pointing to Europe's energy crisis and China's slowing economy as current headwinds. "We're going to enter a period of more what I would call malaise."

Fink also highlighted the sharp declines in stocks and bonds this year, and the sharp rise in the US dollar, as evidence of a "whole reset of the marketplace."

Moreover, he noted that government debts have ballooned, and predicted it would take years for central banks to unwind all of the stimulus they've provided in recent years. That could mean they balk at stimulating their economies in the years ahead.


4. Janet Yellen, Treasury Secretary and former Federal Reserve chair

"The US economy is slowing down but it's operating at a very healthy level," Yellen said. "Consumers remain in good shape, their finances are healthy. Banks are in a healthy state."

"It's certainly possible for us to have a soft landing," she added, referring to an outcome where the Fed succeeds in crushing inflation without sparking a recession.

Read the original article on Business Insider