Last Sunday, Goldman Sachs CEO Lloyd Blankfein said that “there is a very high risk factor that the United States is approaching a recession.”

In an interview with CBS News, Blankfein said that the risk of a recession definitely exists and that businesses and consumers should prepare for such a scenario.

However, the bank executive added that the Fed has a small window of opportunity to use its very powerful tools to avoid a recession.

Blankfein said the Fed has no choice but to keep raising the interest rate to curb consumer demand, even though it will involve some pain. At the same time, he noted that inflationary factors such as the conflict in Ukraine and supply chain crises are temporary and will eventually fade, but until then, as prices rise, “it’s going to be a pretty difficult and depressing situation,” especially for lower-income people.

Blankfein said that while inflation has been triggered by the extra fiscal spending caused by the COVID-19 pandemic, it is not necessarily the government’s fault as it is doing everything it can to avoid another financial collapse.

Last week, U.S. Federal Reserve Chairman Jerome Powell admitted that the central bank was too slow to start raising interest rates to fight inflation.

“They reacted, and I think they did it prudently based on what they knew at the time,” Blankfein said. – You can argue about it, but it’s still with hindsight.”