Top Wall Street bankers have issued a series of warnings, saying that as geopolitical risks further dim the economic prospects in 2023, the possibility of the United States and Europe falling into recession is increasing.

DavidSolomon, CEO of Goldman Sachs, said at the "Future Investment Initiative" meeting in Riyadh, Saudi Arabia, that the economic situation will be "significantly tightened from now on".

Solomon said that the Fed has made it clear that it will raise interest rates to 4.5%-4.75%, and then it will suspend interest rate hikes because of the lag effect. But if the Fed doesn't see a real change in behavior-for example, the labor market is still very tight, "I guess they will go further."

Despite the serious political friction between the United States and Saudi Arabia on the oil issue, Wall Street bankers flocked to Riyadh. In the context of the global economic slowdown, Saudi Arabia has become the fastest growing country in the Group of 20 (G20). As bankers have made it clear, Saudi Arabia is a rare and healthy economy.

Many economists believe that the United States will fall into recession in the next 12 months as the Federal Reserve raises interest rates sharply to further hit demand. In Europe, the energy crisis triggered by the Russian-Ukrainian conflict has led to an unprecedented surge in inflation across the continent. With the economy in recession, governments are spending billions of euros to help consumers and businesses.

FranckPetitgas, head of Morgan Stanley's international business, said at the meeting that 2023 looks a bit risky. "The United States is unlikely to achieve a super soft landing."

JamieDimon, CEO of JPMorgan Chase, was equally pessimistic, saying geopolitics was his biggest concern. JPMorgan Chase is expanding its business in Saudi Arabia. For Dimon, geopolitical risks are far more worrying than economic recession.