Carl Icahn: "US Economy May Face Crisis Beyond Recession"

Carl Icahn [Photo by AFP Yonhap News]

[Asia Economy Reporter Park Byung-hee] 'Corporate raider' Carl Icahn warned that a serious crisis beyond a recession could be imminent due to the US economic slowdown.

According to CNBC on the 22nd (local time), Icahn appeared on CNBC and said that the US economic slowdown might be imminent, and he has increased hedging in preparation for a sharp decline in asset markets.

Icahn said, "I believe a recession or an even more serious situation could occur." He emphasized, "I have been hedging continuously over the past few years, and I am currently strongly hedging my long positions and will hedge more aggressively." He added, "I view the market situation negatively and cannot even make short-term predictions."

Icahn explained, "Inflation is the main threat to the economy," and "The war between Russia and Ukraine has added uncertainty."

To address the inflation pointed out by Icahn, the US central bank, the Federal Reserve (Fed), raised the benchmark interest rate last week for the first time in about three years. Fed Chair Jerome Powell indicated the possibility of a so-called 'big step'?a 0.5 percentage point rate hike at once?during the National Association for Business Economics (NABE) event on the 21st, stating, "The inflation rate is too high."

However, Icahn viewed the Fed's monetary policy cynically. He said, "I am not sure if the Fed can induce a soft landing for the economy," and "If a hard landing occurs and inflation continues, it will be terrible."

As an activist investor, Icahn also expressed his intention to work on improving corporate governance. He said, "There is a need to reform corporate board systems," and "Weak governance can lead to disaster."

Icahn criticized, "There is no accountability in American companies," and "Only a few companies and CEOs are excellent, and too many companies and CEOs do not fulfill their responsibilities."

This content was produced with the assistance of AI translation services.