Fed Ex CEO Raj Subramaniam believes ‘world economy is heading towards recession’, here’s why

Raj Subramaniam, the FedEx CEO, believes that the world economy is facing the threat of a recession. A worried Subramaniam, after his company missed the first quarter's revenue and earnings targets, told CNBC’s Jim Cramer in an interview on Thursday, September 15.

Fed Ex withdrew the guidance it issued earlier for the full year. As a reaction to the first quarter results, FedEx stocks fell 15% by the close of Thursday’s trading.

Is a global recession imminent?

When asked whether the global economy has started going into recession already, Subramaniam said there are no definite and direct measures. A global economic slowdown happens over time, and various parameters will flag up signals in most economies. The CEO felt that some of the numbers were already worrisome; for example, Fed Ex’s Q-1 numbers. At a macro level, there are already indications of an imminent problem. Subramaniam reiterated that much of the company's health is often reflected in the performance of Fed Ex. And if their (Fed Ex) numbers are weak, things don't look very bright overall.

The CEO’s Pessimism

Raj Subramaniam assumed office earlier this year and had grand plans for FedEx to recover quickly from the gloom of the COVID effect of the last two years. Fed Ex anticipated good overall demand with the manufacturing sector opening up, but unfortunately, that didn't happen. As a result, volumes for Fed Ex declined in most segments worldwide. The weekly numbers, too, fail to bring any cheer to the company.

FAQs

What is Fed Ex’s business?
Fed Ex Corporation is an American MNC. The Memphis (Tennessee) headquartered company is in the business of transportation, e-commerce, and other services.

What is the basis of the Fed Ex CEO’s pessimism?
A logistic company like Fed Ex usually acts as a product chain's last link. Therefore, The CEO worries that if his company is not doing well, then other industries are also performing poorly. The overall economy, thus, may head for a recession.