(Reuters) - Citigroup Inc Chief Financial Officer Mark Mason told investors on Wednesday he expected the Federal Reserve to stay committed to its fight against inflation, paving the way for higher U.S. interest rates and a "mild recession" in the latter half of this year.
"The Fed is going to be very resolute about continuing to adjust rates in order to bring inflation down to 2%," Mason said.
The assessment came after Fed Chair Jerome Powell reaffirmed his message of higher and potentially faster interest rate hikes, but emphasized that debate was still underway with a decision hinging on data to be issued before the U.S. central bank's policy meeting in two weeks.
Consumer finances remain generally healthy, but rising inflation and slowing economic activity have weighed on some households, Mason said. Customers with lower credit scores are starting to make more late payments on their credit cards, and that will probably lead to more losses for the bank, he said.
The slowdown in dealmaking will persist for Citi and its Wall Street peers, with investment banking fees likely to decline about 40% this quarter, he said.
Citi's trading volumes are expected to slide by "high single digits" in the first quarter, compared with a strong year-ago quarter, when the outbreak of war in Ukraine roiled financial markets and led to a surge in activity.
The bank reported a 21% decline in fourth-quarter earnings as it set aside more money to prepare for loan losses in a worsening economy.
Despite the economic uncertainty, Mason reiterated comments signaling Citi's revenue would rise to about $78 billion to $79 billion this year, from $75 billion in 2022.
By Nupur Anand and Lananh Nguyen
Editing by Leslie Adler and Richard Chang
