A recent survey of community bank leaders found that nearly all believe that a recession is just around the corner, with more than half of respondents blaming the Federal Reserve.
The financial services firm IntraFi polled C-suite executives at 388 institutions nationwide via email in June and found that 96% of respondents believed a recession would start this year or next year. Fifty-one percent assigned blame to what they viewed as overcorrection by the Fed. However, 25% blamed ongoing supply-chain issues, 5% faulted the conflict in Eastern Europe and 2% said lingering pandemic-related issues would be the likely cause. The remainder blamed a combination of some or all the cited reasons.
“Bankers have become less confident in the Fed’s ability to curb inflation while guiding the economy to a soft landing,” said Mark Jacobsen, CEO and co-founder of IntraFi. “To a degree greater than reflected in the equity markets today, most banks do not believe the Fed can constrain inflation without triggering a recession.”
IntraFi also asked community banks what they were doing to attract and retain workers. Sixty-six percent of respondents said they had increased compensation, with 60% reporting they were having trouble finding qualified candidates for open positions. Remote work was not a job perk most community banks could offer potential hires, with 59% saying their open positions could not be filled remotely.