Morgan Stanley Chief Executive Officer James Gorman said that inflation has peaked and China has made a significant pivot. He added that these two changes have recently happened that matter significantly to the economy.
James Gorman on the US economy and inflation
In an interview with CNBC last Thursday in Davos, Switzerland, the chairman, and CEO of one of the largest global investment banks, Morgan Stanley, James Gorman, discussed the US Economy and China’s relationship with the US.
He said that two things that have changed recently and really matter are inflation being at this peak and China’s recent economic pivot. He added that the question is whether the US Federal Reserve can reach its 2 percent inflation target and how hard it will try to get to 2 percent v/s stabilizing around 3 to 4 percent.
Regarding the US Federal Reserve hiking interest rates, Gorman also mentioned, “We were on a 75-basis point track. We then quickly moved to 50”. Gorman added that he expects the Fed to increase the rate by 25 basis points at the next Federal Open Market Committee meeting.
China has made a significant pivot
Morgan Stanley Chief Executive Officer James Gorman said that inflation has peaked and China has made a significant pivot are now the two things that matter to the economy. While explaining the second change, he said that China had made a major pivot, and now the focus was on the critical reopening.
Morgan Stanley CEO adds that the recent pivot economically, the relationship thawing with the US and the meeting with the vice premier and Secretary Yellen are all big deals. The Treasury explained last week that US Treasury Secretary Janet Yellen met with China’s Vice Premier Liu He on Wednesday as part of efforts to deepen communication and work together to overcome global challenges.
He also added that US President Joe Biden and President Xi Jinping met in Bali and agreed to empower key senior officials to engage in these issues and solve them. Gorman concluded that under President Xi’s mantra of common prosperity, there are only two ways to achieve it: redistribution of existing properties or growing the pie. Hence, everyone gets a piece of it.
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