# U.S. bank executives raise concerns over inflation
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-12-07
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: US Bank Execs Raise Concerns Over Inflation Impact
Meta Description: U.S. bank CEOs express worries over inflation, pressing Fed to act. IMF warns of rising inflationary pressures. Wells Fargo, Goldman Sachs speak out.
URL: https://financedigest.com/u-s-bank-executives-raise-concerns-over-inflationhtml

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By Matt Scuffham

NEW YORK (Reuters) -U.S. [bank executives](https://www.financedigest.com/bank-of-england-fines-former-tsb-executive-over-2018-it-failure.html "Bank of England fines former TSB executive over 2018 IT failure") on Tuesday raised concerns about the impact of a sustained period of higher inflation, adding to pressure on the Federal Reserve to accelerate plans to slow down the pace of its asset purchases.

Wells Fargo Chief Executive Charlie Scharf said at a conference that the Fed may [need to move more quickly to address inflation](https://www.financedigest.com/bank-of-england-still-needs-to-see-the-job-through-on-inflation-pill.html "Bank of England still needs to ‘see the job through’ on inflation: Pill") concerns. Goldman Sachs Chief Executive David Solomon said he anticipated a period of [higher inflation](https://www.financedigest.com/boes-saunders-worries-inflation-will-be-higher-than-forecasts.html "BoE’s Saunders worries inflation will be higher than forecasts").

The International Monetary [Fund last week](https://www.financedigest.com/global-equity-funds-see-biggest-weekly-outflow-in-five-weeks.html "Global equity funds see biggest weekly outflow in five weeks") warned of intensifying inflationary pressures, especially in the United States, and said U.S. [central bankers should focus more on inflation risks](https://www.financedigest.com/inflation-trumps-financial-risks-as-central-bank-tightening-set-to-continue.html "Inflation trumps financial risks as central bank tightening set to continue").

There’s a case to be made that they (the Federal Reserve) should be moving faster than they’ve been moving,” said Scharf, [speaking at the Goldman Sachs Financial](https://www.financedigest.com/how-can-fintechs-better-engage-zillennials-with-their-financial-health-the-answer-lies-in-speaking-to-them-in-their-own-language.html "How can fintechs better engage Zillennials with their financial health? The answer lies in speaking to them in their own language") Services Conference.

“Inflation is very, very real,” he said. [“Prices are significantly higher](https://www.financedigest.com/vhs-tapes-selling-for-46000-higher-than-original-price.html "VHS tapes selling for 46,000% higher than original price") for inputs across most industries. Labor shortage and [wage increases](https://www.financedigest.com/greece-to-increase-minimum-wage-again-before-election.html "Greece to increase minimum wage again, before election") are extremely real. Whether that continues for several years is not all that relevant but it certainly will have an impact over the [next](https://www.financedigest.com/start-up-etioca-eyes-nasdaq-listing-next-year-as-it-unveils-electric-taxi.html "Start-up Etioca eyes Nasdaq listing next year as it unveils electric taxi") year or so.

The Fed needs to be ready to respond to the possibility that [inflation may not recede in the second half of next year](https://www.financedigest.com/spains-inflation-to-be-lower-this-year-than-in-2022-minister.html "Spain’s inflation to be lower this year than in 2022 -minister") as most forecasters currently expect, Federal Reserve Chair Jerome Powell said last week.

“My guess is now that there will be a quicker path to appropriate actions,” said Scharf.

Goldman Sachs’ Solomon anticipates [inflation will be higher for a period but doesn’t expect a repeat of the cost rises](https://www.financedigest.com/oil-rises-about-2-with-u-s-and-china-inflation-in-focus.html "Oil rises about 2% with U.S. and China inflation in focus") seen in the 1970s, he said in an interview with CNBC.

There’s a reasonable chance that we’re going to have [inflation above trend for a period of time](https://www.financedigest.com/love-in-a-time-of-inflation-how-much-will-valentines-day-set-you-back.html "Love in a time of inflation: how much will Valentine’s Day set you back?") but that doesn’t mean it has to be like the 1970s,” he said. You’ve got to be cautious and [manage your risk](https://www.financedigest.com/aon-launches-new-catastrophe-model-to-manage-the-risk-of-icelands-most-disastrous-peril-earthquake.html "Aon launches new catastrophe model to manage the risk of Iceland’s most disastrous peril: Earthquake") appropriately.

Solomon acknowledged “uncertainty” in [global financial markets due to factors including the Omicron COVID-19 variant and question marks over the pace at which the Fed and other central banks](https://www.financedigest.com/global-shares-jump-but-bank-whack-a-mole-not-over.html "Global shares jump but bank ‘whack-a-mole’ not over") will reduce asset purchases.

“We’re still not completely out of the pandemic. There’s [uncertainty that comes from that and that uncertainty is going to affect economic](https://www.financedigest.com/combatting-economic-uncertainty-in-2023-with-the-payments-sector-2.html "Combatting economic uncertainty in 2023 with the payments sector") activity,” he said.

On top of that, we have shifts going on in fiscal and [monetary policy](https://www.financedigest.com/asian-economic-powers-warn-of-risks-from-war-monetary-policy-normalisation.html "Asian economic powers warn of risks from war, monetary policy normalisation") to try to balance that. There’s no question that this has been an unprecedented period so it’s very hard to predict how we’re going to come out of this.”

(Reporting by Matt Scuffham, Editing by Louise Heavens and Emelia Sithole-Matarise)


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