DUBAI, UNITED ARAB EMIRATES – DECEMBER 04: Blackrock CEO Larry Fink speaks at a panel titled “Financing the New Climate Economy,” where he described the urgent need for a “new financial landscape” to finance investments in the climate economy global energy transition on the fifth day of the UNFCCC COP28 climate change conference at Expo City Dubai on December 4, 2023 in Dubai, United Arab Emirates. COP28, taking place from November 30 to December 12, will bring together stakeholders, including international heads of state and other leaders, scientists, environmentalists, indigenous peoples’ representatives, activists and others, to discuss and move towards the implementation of global mitigation measures some the effects of climate change. (Photo by Sean Gallup/Getty Images)
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BlackRock CEO Larry Fink predicted Friday that the Federal Reserve will likely cut interest rates again this year but will fall short of its inflation target.
With market uncertainty over the direction of monetary policy, the head of the world’s largest asset manager said it was unlikely the central bank would meet its 2 percent target any time soon. A report earlier this week showed inflation at 3.5% per year.
Still, Fink expects the Fed to make some rate cuts this year, although it may have to admit that inflation will remain high.
“When everyone said we were going to have six cuts at the beginning of the year, I had reputable economists say maybe two,” Fink said during an interview on CNBC’s “Squawk on the Street.” “I still say maybe two.”
Although this forecast deviates from consensus in January and February, it is consistent with recalibrated market expectations since high inflation figures have prevailed this year. Fed officials have expressed reluctance to cut until they see more convincing evidence that the pace of price increases is back on target.
But Fink said the central bank may have set its inflation targets too high or too low.
“Inflation has moderated and we have always said that inflation will moderate. But will it weaken to the ultimate interest rate that the Federal Reserve is targeting? I have doubts,” he said. “Do I think we can achieve stable inflation between 2.8% and 3%? I would call it a victory.”
Fink spoke the same day BlackRock reported quarterly earnings that exceeded Wall Street expectations for both profit and revenue. The company also said its assets under management reached a record $10.5 trillion.
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2024-04-12 15:46:34
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