After a year roiled by war, an energy crisis, and soaring inflation that triggered the fastest monetary policy tightening cycles in recent times, major world banks expect a global slowdown in the economy in the year 2023. The gloomy picture includes the housing market slumping, the bond market’s yield curve inverting, and the Federal Reserve projecting the unemployment rate to rise in 2023. A recent survey from the Conference Board and Business Council found 98% of CEOs anticipating a recession over the next 12 to 18 months. The increasing Recession fears have made the billionaire Jeff Bezos warn people about the ongoing economic situation.

The Executive President of Amazon further warned people against buying ‘big ticket items like cars, TVs, and refrigerators.’ Jeff Bezos advised people to take some risk off the table and hold onto their money. He said, “Keep some dry powder on hand. A little risk reduction could make the difference for that small business if we get into even more serious economic problems. You’ve got to play the probabilities a little bit.” Asking people to remove risk from the equation, he requested them to put the purchase of a big-screen TV on hold. In the same interview with CNN, the billionaire said that the economy is slowing down, which is also indicated by the number of layoffs in many sectors of the economy.

Remember, the E-commerce giant Amazon has laid off thousands of employees, frozen hiring, and made cutbacks. Meta has fired 11,000 employees and Google today announced firing 10,000 employees after a performance review. These big tech firms, which experienced tremendous profit during the COVID-19 Pandemic, overhired employees. They are now facing problems such as several demographic factors, from baby boomer retirements to a declining working-age population and persistently low labor force participation rate.

Hence these tech companies are failing to reach their targeted revenue and profit. Because of slower growth, the companies are now moving to a more conservative stance on costs. However, analysts say there are fewer similarities between the 2008 recession which led to a ‘jobless recovery’ compared to this time, where people may still have jobs, as the unemployment levels expected are not high by historical standards.

The world’s biggest banks are also preparing for the Recession as they see the global economy slowing more in 2023. Since rolling out its first hike in March, the U.S. Federal Reserve has increased interest rates by 375 basis points. Credit Suisse is expected to make a heavy loss for the first quarter next year as wealthy clients pull out of the embattled Swiss bank. The hefty client withdrawal of savings and investments leads to a drop in liquidity and the bleeding of billions of francs. Remember, Goldman Sachs CEO David Solomon and JPMorgan CEO Jamie Dimon said last month that they expect a U.S. recession as the tight labor market keeps the Federal Reserve on an aggressive monetary policy tightening trajectory.