Blackrock CEO Expects Inflation to Persist But No Great US Recession in 2023 – Economics Bitcoin News
Blackrock’s CEO, Larry Fink, stated in an interview on Friday that he does not expect a “major recession” in the United States. However, he believes that “inflation is going to be stickier for longer.” Against the Fed’s target of 2%, Fink predicts that “we’re going to have a 4-story inflation.”
Blackrock clients de-risk portfolios as inflation concerns persist
Larry Fink, chairman and CEO of Blackrock (NYSE: BLK ), the asset manager with more than $9 trillion in assets under management (AUM), predicts that inflation in the United States will persist for a significant period of time. Fink was interviewed on Friday by the hosts of CNBC’s “Squawk on the Street” and stated that he does not expect a major economic downturn in the country.
“I don’t expect a major recession in [United States]”, Fink told the hosts. He also stressed that the significant fiscal stimulus being injected into the country must be “compensated”.
While acknowledging that some sectors of the economy are “weakening”, Fink stated that “other sectors, because of these huge fiscal stimulus, are going to offset some of this.” The Blackrock CEO also discussed inflation, stressing that he thinks it’s “going to be sticky longer. In other words, I think we’re going to have a 4 floor in inflation.”
Regarding a possible recession in 2023, he stated that he is “not sure we’re going to have a recession” and suggested that it could happen in 2024. Fink also expressed confusion over the reaction to the fall of Silvergate Bank, Silicon Valley Bank , and signature bank.
This is not a systemic problem, this is not a problem that is going to have an impact. As we saw today, we had our big banks that had good quarters … performed very well. So I think this is just an example of, you know, when the ocean or the tide goes out, some people are going to be left there.
In mid-March, Fink shared his views on the banking industry following the collapse of three banks, claiming that “we will likely see tighter capital standards for banks.” Fink’s latest assessment, which was shared with CNBC hosts on Friday, coincides with recent comments from Blackrock’s chief investment officer for global fixed income, Rick Rieder.
Rieder expects the US central bank to raise the benchmark interest rate to 6% this year and keep it at that level for a longer period to curb inflationary pressures. During his interview, Fink also informed CNBC that Blackrock’s clients are reducing risk in their portfolios.
“We are seeing more and more clients looking to reduce risk while maintaining a more holistic and robust portfolio by establishing a stronger foundation of bonds and stocks,” explained Fink.
Furthermore, the Blackrock CEO touted the company’s success over the past five years, boasting of having “grown $1.8 trillion in net inflows.” Despite “all this pessimism,” he emphasized that Blackrock grew “more in this first quarter than the first quarter of ’22.”
What do you think Larry Fink’s predictions mean for the future of the US economy? Do you agree or disagree with the Blackrock CEO’s assessment of the inflationary environment and the likelihood of no recession in 2023? Share your thoughts in the comments below.
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