Top bank executives from some of the largest lenders in the United States sounded the alarm over soaring inflation Wednesday.

In testimony before the House financial services committee, Citigroup CEO Jane Fraser said she “expects tough times ahead” due to the rising prices in the United States and elsewhere as central bank officials have sought to hike interest rates to combat inflation.

“We’re very concerned about the high prices consumers are facing in America and indeed around the world,” she said.

Wednesday’s testimony came just hours before the Federal Reserve boosted the federal funds rate by 0.75 percentage points to the range of 3% to 3.25% in its latest move to fight the highest inflation in 40 years.

The Fed’s third consecutive rate hike aims to slow consumer spending levels after the monthly inflation rate increased unexpectedly in August.

“The impact of higher rates that are required to try to tame the inflation is likely to be moderating growth in America and around the world, and will be putting pressure on many of the drivers of the economy,” Fraser said.

Rep. Bill Posey, R-Fla., asked the executives if Congressional spending was responsible for high inflation to which JP Morgan CEO Jamie Dimon replied, “I don’t think you can spend $6 trillion and not expect inflation.”

Other executives at the hearing included CEOs from U.S. Bank, Bancorp, PNC, Bank of America, Truist and Wells Fargo who warned economic uncertainty over Russia’s war in Ukraine could make a possible recession worse.

“Because of the war in Ukraine and the uncertainty it causes in the global energy supply and food supply, there’s a chance it could be worse,” Dimon testified. “Those things will absolutely cause a slowdown in the economy and at one point increase unemployment.”

“Inflation is affecting those the most that can afford it the least,” U.S. Bank CEO Andrew Cecere testified. But “savings levels continue to be above pre-pandemic levels,” he added.

Dimon also pointed out that consumers are in better shape now than before the pandemic which could help them weather a downturn.

“The American consumer is actually still in rather good shape,” the JP Morgan executive said. “They have a good balance sheet, their debt balances are low, confidence levels are going, jobs are plentiful.”

“The U.S. economy today is a classic tale of two cities. There are headwinds and tailwinds, making it challenging to predict the future,” Dimon said in a prewritten statement.

“While these storm clouds build on the horizon, even the best and brightest economists are split as to whether these could evolve into a major economic storm or something much less severe.”

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