BlackRock CEO Larry Fink said in an interview Friday that he does not expect a “major recession” in the United States. However, he believes that “inflation will stick around longer.” In contrast to the U.S. central bank’s 2% target, Fink predicts that “the lower bound on inflation will be around 4.”
BlackRock clients are reducing risk in their portfolios
as inflation concerns continue.
Larry Fink, chairman and CEO of BlackRock (NYSE: BLK), an asset manager with over $9 trillion in assets under management (AUM), expects U.S. inflation to persist for a significant period of time. Fink, who wasinterviewedby the host of CNBC’s “Squawk on the Street” on Friday, said he does not expect a major recession in the country.
Fink told the broadcast host, “I don’t expect [the U.S.] to go into a major recession.” He also stressed the need to “offset” the significant fiscal stimulus that has been injected.
Fink acknowledged that some sectors of the economy are “weakening,” but said that “other sectors will be offset in part by these significant fiscal stimuli. “The Blackrock executive also mentioned inflation, saying, “For longer , inflation will continue,” and emphasized that he believes that “inflation will continue. In other words, I think inflation will be around 4%.”
Regarding a possible recession in 2023, he said, “I don’t know if there will be a recession,” and suggested it could happen in 2024. Fink also expressedpuzzlementat the reaction to the failures of Silvergate Bank, Silicon Valley Bank, and Signature Bank.
Fink said:
This is not a systemic problem that will affect us. As we saw today, the big banks had a great quarter: …… Their performance was very good. I think this is an example of how when the sea or tide recedes some people get left behind there.
In mid-March, Fink shared his views on the banking industry in the wake of three bank failures, asserting that “capital standards for banks could become more stringent.” Fink’s latest assessment, which he shared with the CNBC host on Friday, coincides with recent remarksby Rick Reeder, BlackRock’s chief investment officer for global fixed income,
Leader expects the Federal Reserve to raise its benchmark interest rate to 6% this year and hold it at that level for an extended period of time in order to ease inflationary pressures. In an interview, Fink also told CNBC that BlackRock clients are reducing risk in their portfolios.
“More and more clients are looking to reduce risk while maintaining a more holistic and resilient portfolio by building a strong base of bonds and equities,” Fink said.
