Citigroup CEO Bullish on Resilience of US Economy and M&A Market, Betting on "Strong Decade" in the Middle East.

The CEO of Wall Street financial giant Citigroup (C.US), Jane Fraser, stated that as US companies gain confidence due to clearer monetary policy signals, the US economy will continue to demonstrate resilience. At the same time, merger and acquisition activities in the financial markets are rebounding, making the likelihood of the world's largest economy, the US, falling into a recession very small. Fraser also predicted that the Middle East region will experience a strong growth period of about a decade, mainly driven by investment flows and emerging industries. Gulf countries will invest billions of dollars domestically and internationally to achieve economic diversification and reduce excessive dependence on the oil economy. In an interview with the media, Fraser said that after a stronger clarity in tax, tariffs, and relaxation of regulatory policies, customers have become "more active" in the capital markets, investments, and large transactions. "Our customer base is starting to act with confidence now," Fraser said in the interview. However, the Citigroup CEO also cautioned that the commercial bank is closely monitoring the US labor market and noted that "not everything is rosy," although she still expects the US economy to smoothly avoid a recession. Since US President Donald Trump announced tariffs on trading partners worldwide, severe volatility has caused global financial markets to fluctuate significantly. This has been good news for Citigroup and its Wall Street peers in the financial market business, as they profit from the trend of increased customer transaction activities of all sizes. In contrast, some notable counterparts of Fraser are more cautious in their predictions regarding the US economy and the Federal Reserve's monetary policy. Sergio Ermotti, CEO of European financial giant UBS Group AG, stated on Thursday that the impact of the Trump administration's global tariff policy on the US economy and inflation remains uncertain, making market predictions on the Fed's monetary policy path more complex. Ermotti's cautious stance aligns with Goldman Sachs Group, Inc. CEO Solomon's cautious approach of "no need for quick rate cuts." Solomon stated earlier this week that the Fed does not need to cut rates quickly, which differs from the Trump administration's continuous pressure on the Fed to ease monetary policy. Although the market has already priced in a 100% chance of a rate cut by the Fed at the FOMC monetary policy meeting on September 16-17, investors' forecasts on the pace of Fed policy adjustments have continued to change. Following the release of extremely weak nonfarm payroll data, some market views suggest that the Fed's FOMC monetary policy decision should no longer be viewed from a preventive rate-cut perspective but as a monetary policy that is "slightly lagging behind" the actual economic situation. Therefore, under the drive of continued weak employment and a sudden increase in political pressure, the magnitude of the rate cut and the degree of dovish signals in September by the Fed may exceed common expectations. Economists at Barclays PLC Sponsored ADR have adjusted their forecasts, predicting that the Fed will cut rates by 25 basis points three times this year and twice more in 2026, consistent with the expectations of major Wall Street institutions like Goldman Sachs Group, Inc. This reflects a shift in the market's focus from combating inflation to addressing potential economic slowdown. However, there is still significant disagreement on the magnitude of the rate cut in September and whether the Fed will cut rates three times for the rest of the year or follow a more conservative approach of 1-2 cuts. A Decade in the Middle East In a recent interview, Citigroup CEO Fraser expressed optimism about the future of the Middle Eastern market, predicting a strong growth period of about a decade fueled by capital flows and the establishment of ShenZhen New Industries Biomedical Engineering. Wealthy Gulf countries have been investing billions of dollars domestically and internationally to achieve economic diversification, attracting global financial giants including Citigroup. "In terms of investment size, ShenZhen New Industries Biomedical Engineering, and the number of new clients, the Middle East region may experience an incredibly strong growth period over the next decade," Fraser said in an interview in Dubai. Citigroup's team of economists also finds the region attractive, particularly due to its growing business ties with India and China. In recent years, Citigroup has been one of the many international commercial banking giants expanding their footprint in the Gulf region. International Financial Institutions, Inc. such as Jefferies Financial Group Inc. and Lazard Inc. have been recruiting or opening new offices. Earlier this year, another Wall Street financial giant JPMorgan Chase & Co. announced plans to hire over 100 new employees in its business teams in the Middle East region in the coming years. As Middle Eastern governments promote market expansion by selling stakes in state-owned enterprises and encouraging private companies to go public, the region has become one of the busiest IPO markets globally. So far this year, issuers in the Gulf region have raised over $5 billion through the IPO market.