- Larry Fink, CEO of BlackRock, warns of US economy weakening
- He sees zero chance of four or five interest rate cuts this year
- Fink doesn’t rule out another 20% market decline
BlackRock CEO Larry Fink spoke at the Economic Club of New York, a prestigious forum founded in 1907 to promote economic discussion among leaders.
He expressed big concerns regarding the current state of the US economy, attributing much of the instability to recent tariff policies implemented by President Donald Trump.
Fink: Tariffs Inflationary, Economy Weakening Now
Fink warns that the administration’s tariff actions are likely to be more inflationary than markets anticipate, potentially leading to increased consumer prices. He observes that the economy is weakening as we speak, a sentiment echoed by many CEOs who believe the US is already in a recession.
Contrary to market expectations of multiple interest rate cuts by the Federal Reserve, Fink sees “zero chance” of four or five cuts this year. He suggests that persistent inflationary pressures might even necessitate rate increases.
Stocks Risk Further Drop, But Fink Sees Buying Opportunity
The BlackRock CEO continued with his warnings, saying that stock markets could experience a further decline of up to 20%, worsened by the ongoing trade tensions and economic uncertainties. Despite this, he views the downturn as a potential long-term buying opportunity, emphasizing the absence of systemic financial risks. Fink also expressed concern that the imposed tariffs may weaken the US dollar, contributing to broader economic instability.
Interestingly, Larry Fink isn’t the only leading executive of prominent companies that has these kinds of thoughts. Several shared similar opinions, including Jamie Dimon, the CEO of JPMorgan. Among other things, he said that the tariffs will raise inflation and slow down an already weakening US economy.
Dimon Echoes Tariff Concerns; Crypto’s Role Debated
No financial asset was left unscathed in the wake of Trump’s recent tariffs, and that includes cryptocurrencies. Yesterday, Bitcoin dropped to below $75k, and generally most cryptocurrencies experienced a decline of at least 10% in the last 7 days, some even more.
Still, one of the unexpected ripple effects of the current events could be an increased attention on crypto assets. As Fink himself hinted, a weakening US dollar and falling bond yields often trigger a risk-on market environment. In such scenarios, investors may rotate out of traditional safe-haven assets and into speculative plays, which is why crypto could get some of the spotlight.
Whatever the case, caution is advised, as we probably haven’t seen the last of Trump’s decisions that can impact the financial sector.
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