Blackrock CEO Larry Fink said on Monday that many business leaders believe the U.S. economy may already be in a deep recession.
"Most of the ceos I talk to are saying we could be in a recession right now," Fink claimed at an economic event that day.
The asset manager executive also said he believes Trump's tariff policies could put upward pressure on inflation and make it more difficult for the Fed to cut interest rates, as it usually does during a recession.
"I think there's zero chance the Fed will cut rates four times this year. I'm more concerned that we could have a spike in inflation that would lead to a much higher base rate than it is now." According to CME data, the market expects the Fed to start cutting rates aggressively in June, with cuts of at least 100 basis points by the end of the year.
Regarding the recent slump in the U.S. stock market, Fink commented that he still does not rule out the possibility of another 20% drop in the U.S. stock market, but he believes that this is a rare long-term buying opportunity.
By the end of 2024, BlackRock had more than $11 trillion in assets under management. Because of the size of its assets under management, BlackRock wields enormous influence in global financial markets. Not only is it a significant shareholder in many large companies, it also influences the direction of the global economy through its investment decisions and market views.
At the same time, business leaders and billionaires are slamming Trump as tariffs rattle global financial markets. Pershing Square Capital founder Bill Ackman, who backed Trump's presidential bid, warned on Sunday that going ahead with the new tariffs would be tantamount to starting an "economic nuclear war."
Ackman said that if the new tariffs do go into effect, business investment will stall and consumers will keep their wallets closed. "Tariffs will severely damage our country's reputation in the rest of the world, which could take years or even decades to recover."
Billionaire Stanley Druckenmiller said Monday that he "does not support tariffs above 10 percent." Even Musk, the world's richest man and Trump's top aide, said on Sunday that he wanted "zero tariffs" between Europe and the United States.
Echoing Ackermann, Simon MacAdam, deputy chief global economist at Capital Economics, said businesses may hold off on investment, in large part due to "uncertainty" created by Trump's tariff policies. "If these tariffs are going to come down again in a few months, you're wasting your time investing hundreds of millions of dollars in new factories in the United States."
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