Former Goldman Sachs CEO Blankfein says recession is'very high risk factor'

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Former Goldman Sachs CEO Blankfein says recession is'very high risk factor'

Blankfein, CEO of Goldman Sachs, speaks at the Boston College Chief Executives Club luncheon in Boston.

WASHINGTON Reuters - Former Goldman Sachs CEO Lloyd Blankfein believes that the economy is at risk of a recession, as the U.S. Federal ReserveFederal Reserve continues to raise interest rates to deal with rising inflation.

Blankfein said on Face the Nation on CBS that a recession is very, very high risk factor. There is a path. Blankfein, who retired from Goldman Sachs several years ago, now holds the title of senior chairman.

I think the Fed has very powerful tools. It's hard to fine tune them, and it's hard to see the effects of them quickly enough to alter it, but I think they're responding well. Last week, Federal Reserve Chairman Jerome Powell acknowledged that increasing interest rates will include some pain, but added that a far worse outcome would be for prices to continue to spiking.

The Fed approved a quarter-percentage-point rate increase in March. Some analysts say policymakers have fallen too far behind to curb price increases without the kind of rate hikes that could cause a recession.

Blankfein told CBS he agrees with Powell's assessment and said that some of the inflationary effects the economy is going to be sticky. He said that it's going to be quite difficult and oppressive for individuals, and certainly for individuals at the bottom quartile of the pie sharing.

Blankfein served as CEO at Goldman Sachs from 2006 to 2018, including the tumultuous financial crisis that led the U.S. government to implement a bank bailout program.