Macquarie Group chairman and former Reserve Bank governor Glenn Stevens says the risk of global recession is real, as the investment giant said conditions were softening and it was cautious about the outlook.

After US Federal Reserve chairman Jerome Powell raised interest rates again and said the world’s biggest economy was not in recession, Stevens on Thursday ran his first annual meeting as chairman of Sydney-based investment bank and asset manager Macquarie.

Macquarie’s update, despite its cautious tone, was better than markets expected. Analysts said it appeared to be weathering market turmoil better than other global investment banks.

As investors remain transfixed on inflation and rising interest rates, Stevens said he would not offer “gratuitous advice” on monetary policy, but central bankers globally faced a tough job in containing inflation without sparking a major economic slump.

“They do face, as Phil Lowe has said, a narrow path to the fabled soft landing. The environment they face is very difficult because supply side developments have turned adverse over recent years. So, it will be hard, and I think the truth is that we need to be alert to the risk of recession,” said Stevens, who took over from former chairman Peter Warne in May.

Against these challenges, Stevens said central bankers would be closely monitoring economic conditions and “highly alert” to the risk of lifting rates too sharply. “So, difficult task ahead, and I think they’re as well-equipped as you could hope to meet it,” he said.

The comments from Stevens, who was RBA governor between 2006 and 2016, came after Macquarie said its profits lifted in the latest quarter, though trading conditions facing its businesses softened, and the company’s outlook was cautious.

After a record profit of $4.7 billion in the year to March, the market is expecting lower earnings this year, amid softer financial market conditions and less deal-making.

Chief executive Shemara Wikramanayake flagged softer conditions in key parts of Macquarie, such as its well-known investment banking unit, but also underlined the broad range of businesses it owned.