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Speaking on "Face the Nation" on CBS, Blankfein said a recession
is "a very, very high risk factor."
"There's a path. It's a narrow path," said Blankfein, who
retired from Goldman Sachs several years ago and now holds the
title of senior chairman.
"But I think the Fed has very powerful tools. It's hard to
finely tune them, and it's hard to see the effects of them
quickly enough to alter it, but I think they're responding well.
It's definitely a risk."
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
spiking.
In March, the Fed approved a quarter-percentage-point rate
increase. But some analysts say they fear policymakers have
fallen too far behind to curb price increases without the sort
of sharp rate hikes that might cause a recession.
Blankfein told CBS he agrees with Powell's assessment, and said
some of the inflationary effects the economy is enduring now
will be "sticky."
"Overall for individuals, and certainly for individuals at the
bottom quartile of the ... pie sharing, it's going to be quite
difficult and oppressive," he said.
Blankfein served as CEO at Goldman Sachs from 2006 through 2018,
a tenure that included the tumultuous financial crisis that led
the U.S. government to implement a bank bailout program.
(Reporting by Sarah N. Lynch in Washington; Editing by Mary
Milliken and Matthew Lewis)
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