โMost CEOs I talk to would say we are probably in a recession right now,โ Fink said Monday at the Economic Club of New York, according to Reuters. He blamed steep U.S. tariffs for driving up prices and adding to inflationary pressures, further dampening sentiment across markets.
While global equities staged a recovery on Tuesday, Fink cautioned that the worst may not be over. โThat doesnโt mean we canโt fall another 20% from here too,โ he said.
On Tuesday, U.S. S&P 500 futures rose 0.9% after the benchmark index ended a volatile Monday session with a 0.2% loss. Wall Street swung between steep losses and sharp gains as investors reacted to conflicting signals on trade. A report suggesting President Donald Trump was considering a 90-day pause in tariffs for all countries except China briefly lifted markets, but the White House later dismissed the story as โfake news.โ
The market selloff began last week after Trump announced sweeping new tariffs, followed by Mondayโs threat of an additional 50% levy on Chinese imports. The S&P 500 has since fallen nearly 20% from its February peak.
Meanwhile, Treasury yields continued their sharp rebound. The 10-year yield rose as much as six basis points to 4.216% on Tuesday, after surging 17 basis points the day beforeโsnapping back from recent six-month lows. The U.S. dollar edged lower against a basket of six major currencies, following a 1.2% two-day rally from a six-month low.Fink, one of the first major Wall Street executives to publicly address the market turmoil, said the recent pullback could present a long-term buying opportunity. Still, he warned that the real-world impact is already being felt across the U.S. economy.โThe reality is 62% of Americans now invest in equities โ the market impact is affecting Main Street,โ Fink said. โItโs going to freeze more and more consumption; I think weโre going to start seeing that really quickly.โ
He added that the Trump administration could help counteract weakening consumption by embracing deregulation and pro-growth measures, including support for mergers among large U.S. banks.
Fink also dismissed the idea that the Federal Reserve would aggressively ease policy in response to the downturn. โI donโt believe weโre going to see four or five rate cuts this year,โ he said.
The BlackRock CEO further expressed concern that the U.S. risks losing its status as the worldโs leading capital market. He also noted that a regulatory review of BlackRockโs pending deal with Hong Kong-based CK Hutchison for control of key ports near the Panama Canal could take another nine months.
Calling the transaction commercially motivated rather than geopolitical, Fink said he had discussed the deal with U.S. policymakers and remained optimistic about its approval.
Also read | Sensex stages shaky 1,000-point comeback: How savvy investors can build a Trump-tariff-proof portfolio
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
Source link
