NEW YORK, April 20 (Reuters) – Wells Fargo CEO Charlie Scharf said on Monday that lowering interest rates now, before there is clarity about a potential end to the Iran conflict, would be “the wrong thing to do.”
“Until it’s clear what the end is in sight, there’s real risk out there,” Scharf said, adding that there seems to be a consensus about waiting to see how the Iran conflict will play out.
At an event at the Economic Club of Washington, Scharf said the conflict had so far little effect on the U.S. economy, that continues to be strong despite volatility in financial markets.
The Wells Fargo CEO said the U.S. consumer is still increasing spending, from 5 to 7% over the same period a year ago. The higher expenses with gas are resulting in adjustments in other categories, he said.
The effect may be bigger if the conflict takes longer. “If this goes on for a longer period of time, it can be damaging,” the CEO said.
Scharf does not see a systemic risk in losses with private credit and added it would be natural that some portfolios could be more affected by the credit cycle.
(Reporting by Tatiana Bautzer and Utkarsh Shetti;Editing by Nick Zieminski)
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