By Elizabeth Dilts Marshall and Niket Nishant

(Reuters) – Wells Fargo (NYSE:) & Co CEO warned on Wednesday that the Federal Reserve would discover it “extraordinarily tough” to handle a mushy touchdown of the economic system because the central financial institution seeks to douse the inflation hearth with jumbo rate of interest hikes.

The CEO of the fourth-largest U.S. lender additionally mentioned that Wells Fargo is seeing a direct impression from inflation on customers’ spending, significantly on gasoline and meals.

“The situation of a mushy touchdown is … extraordinarily tough to realize within the setting that we’re in as we speak,” Wells Fargo Chief Government Officer, Charlie Scharf, mentioned at a convention.

“The economic system does must sluggish so as to tame inflation. If there’s a brief recession, that is not all that deep… there can be some ache as you undergo it, general, everybody can be simply fantastic popping out of it,” he added.

Scharf’s feedback come a day after U.S. President Joe Biden met with Federal Reserve Chair Jerome Powell to debate inflation, which is hovering at 40-year highs.

The Fed is below stress to decisively make a dent in an inflation charge that’s operating at greater than 3 times its 2% purpose and has brought about a bounce in the price of residing for People. It faces a tough activity in dampening demand sufficient to curb inflation whereas not inflicting a recession.

Scharf mentioned whereas the general client spending is powerful, progress is slowing.

“Firms are nonetheless spending, the place they will they’re rising inventories … we do anticipate the buyer and finally companies to weaken, which is a part of what the Fed is attempting to engineer however hopefully in a constructive approach,” he added.