"To Avoid Economic Recession, US Inflation Must Stabilize at 4%"

Citadel Founder: "If It Falls Within This Year, Fed May Slow Tightening"
US Trade Representative: "Tariff Reduction on Chinese Imports Also Under Consideration"

From the left, Katherine Tai, United States Trade Representative (USTR), Ken Griffin, founder of Citadel, Jane Fraser, Chief Executive Officer (CEO) of Citigroup
Photo by AFP, Reuters, Yonhap News

[Asia Economy Reporter Park Byung-hee] The Milken Conference, a global economic and financial forum held annually in the United States each spring, focused this year on inflation and the risk of a recession triggered by the U.S. Federal Reserve (Fed).

According to Bloomberg News on the 2nd (local time), at the Milken Conference held in Beverly Hills, Los Angeles (LA), U.S. Trade Representative (USTR) Katherine Tai said that all options would be considered to curb rising prices. In particular, Tai mentioned that lowering tariffs on Chinese imports is also included among the options under review.

The U.S. government imposed tariffs on more than 2,200 Chinese products during the U.S.-China trade dispute under former President Donald Trump’s administration in 2018. Although the Biden administration has reduced the number of targeted items, it has maintained the tariff policy on Chinese imports. As inflation intensified, with the U.S. consumer price index rising to 8.5% in March?the highest since December 1981?calls to reduce tariffs on Chinese imports have recently grown louder.

However, Tai emphasized that the issue of lowering tariffs on Chinese imports must align with medium-term policy goals. She said, "We can review the tariff issue, but there is a strategy we need to consider," adding, "What matters is what we can achieve by using tariffs."

Ken Griffin, founder of Citadel, stated that for the U.S. economy to avoid a recession, inflation must stabilize at around 4%. Griffin said that if consumer prices fall to 4% by the end of this year, the Fed could slow its monetary tightening measures. He warned that if the current high inflation rate of 8.5% persists, the Fed, which has focused on economic stimulus so far, will have to apply the brakes very strongly, potentially pushing the U.S. economy into a recession.

Griffin pointed out the labor supply imbalance, suggesting that U.S. inflation could worsen. He said, "There are twice as many job openings as unemployed people looking for jobs," adding, "This increases wage pressure and could further exacerbate inflation."

Jane Fraser, CEO of Citigroup, noted that recession concerns are increasing financial market uncertainty, pointing out that current market volatility is the highest since the 2008 global financial crisis.

Fraser also announced plans to sell the Russian business. She said Citigroup plans to sell both its Russian commercial banking and consumer finance divisions and is actively seeking buyers. However, she mentioned that services for corporate clients in Russia will continue.

Fraser explained that Citigroup is helping many multinational companies around the world reduce their Russian operations, making it impossible for Citigroup to completely withdraw from the Russian market.

Meanwhile, the Milken Conference, which opened on the 1st, continues until the 4th under the theme "Celebrating the Power of Connection."

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