The US may be headed for a credit crunch that could deepen a looming recession, Citi global chief economist says

• Citi's Nathan Sheets says the US may be headed for a credit crunch.
• Such a scenario could deepen an economic downturn and ensure a more prolonged recession. 
• Tightened lending standards are a "very significant wild card [with] a downside risk that we are very, very focused on." 

Citi's chief economist Nathan Sheets says the US may be headed for a credit crunch and a recession in the coming months, citing the Federal Reserve's monetary tightening and ongoing fallout from bank turmoil. 

The Fed has aggressively hiked interest rates over the past year to lower decades-high inflation. The central bank may keep hiking because the labor market remains tight and inflation is still far off from its 2% target.