Dubai, United Arab Emirates – December 4: Larry Fink, CEO of BlackRock, speaks in a roundtable discussion entitled: “Financing the New Climate Economy,” during which he described the urgent need for a “new financial landscape” to finance investments in the region. Global energy transition on day 5 of the UNFCCC Climate Conference (COP28) at Expo City Dubai on December 04, 2023 in Dubai, United Arab Emirates. COP28, taking place from November 30 to December 12, brings together stakeholders, including international heads of state and other leaders, scientists, environmentalists, indigenous representatives, activists and others to discuss and agree on the implementation of global measures towards mitigation. Effects of climate change. (Photo by Sean Gallup/Getty Images)
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BlackRock CEO Larry Fink predicted on Friday that the Federal Reserve is likely to continue cutting interest rates this year but will fall short of its inflation target.
With markets nervous about the direction of monetary policy, the head of the world's largest money manager said the central bank was unlikely to achieve its 2% target any time soon. A report earlier this week showed inflation running at an annual rate of 3.5%.
However, Fink expects the Fed to make some cuts this year while it may have to acknowledge that inflation will remain high.
“When everyone said we were going to make six cuts earlier this year, from famous economists, I said maybe two,” Fink said during an interview with CNBC’s “Squawk on the Street.” “I'd still say maybe two.”
Although these forecasts were outside the consensus in January and February, they are consistent with recalibrated market expectations since hot inflation readings became prevalent this year. Fed officials have expressed reluctance to begin cutting until they see more convincing evidence that the pace of rate increases is on target.
But Fink said the central bank could set its expectations too high or too low, as might be the case for inflation.
He said, “Inflation has declined and we have always said that inflation will moderate. But will it move to the final rate that the Federal Reserve is looking for? I feel doubtful.” “Do I think we can reach a stable inflation rate between 2.8% and 3%? I would consider that a day and a victory.”
Fink spoke the same day Black stone It announced quarterly earnings that exceeded Wall Street expectations in terms of profits and revenues. The company also said its assets under management reached a record $10.5 trillion.
