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BlackRock CEO Larry Fink said Tuesday he doesn't think the Federal Reserve will cut interest rates as much as some analysts expect, citing “embedded” inflation.
At the annual Future Investment Initiative (FII) roundtable in Saudi Arabia, the heads of the world's largest asset managers were asked how much they thought the central bank would cut interest rates by the end of 2024.
BlackRock CEO Larry Fink during a television interview in New York on January 12, 2024. (Photographer: Victor J. Blue/Bloomberg via Getty Images / Getty Images)
“It would be fair to say there will be at least a 25 (basis point) cut, but that being said, I do believe there is more inflation embedded in the world than we have ever seen,” Fink said. “I am doing so,” he said.
The Fed cut interest rates by 50 basis points in September, lowering the benchmark federal funds rate to a range of 4.75% to 5% for the first time in four years. Following the rate cut, JPMorgan analysts expected the central bank to cut rates twice more by the end of this year, with further cuts to come in 2025.
Republican senator explains why inflation is 'hitting seniors especially hard' under Democratic administration
The Labor Department reported that inflation cooled to a three-year low in September, but the consumer price index rose 2.4% year-on-year, slightly higher than expected.
People shop at a grocery store in Brooklyn, New York City, July 11, 2024. (Photo by Spencer Pratt/Getty Images/Getty Images)
Overall, the report showed signs that inflationary pressures in the U.S. economy continue to ease, although prices remain above the Fed's 2% target.
High inflation is creating severe financial pressure on most countries US householdsare forced to pay more for necessities such as food and rent.
More Americans are living paycheck to paycheck than five years ago, according to Bank of America data.
“Our government and policies are far more inflationary, whether it's immigration or domestic shoring policies, but no one is asking all of them: At what cost?” Fink said at an FII event. spoke.
Monday, July 1, 2024 at BlackRock headquarters in New York, USA.
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| BLK | BlackRock Co., Ltd. | 1,014.35 | +22.52 |
+2.27% |
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“Historically, we've had a more consumer-driven economy, where the cheapest products were the best, and we've had the most progressive political approach,” he continued. “I think government policy now has inflation built into it. That being said, I don't think interest rates will be as low as people are expecting.”
