On June 2, BlackRock CEO Larry Fink said that the U.S. and even the world would face years of rising inflation. The main reason is that the world supply chain is hindered, and the Fed lacks the right tools to fix it.
Fink argues that the Ukraine war has brought profound changes to the global economy, forcing companies and governments to reconsider their reliance on foreign markets and spend more to boost local capabilities. Currently, BlackRock faces a world beset by surging inflation, rising interest rates, and geopolitical turmoil. In March, Fink warned in a letter to investors that the Russian-Ukrainian conflict would reshape the world economy, prompting companies to pull out of global supply chains, fueling inflation further. He also said that the Russian-Ukrainian battle would end the globalization experienced over the past three decades.
Additionally, Fink explained that the CCP virus and lockdown policies in different parts of the world could exacerbate the situation, as inflation issues are related to policy, and inflationary pressures from a consumer-driven economy, along with the energy transition, could also fuel higher inflation. Fink suggested that policy and supply shocks are behind the turmoil in the market economy, the market is adjusting itself, and if the Fed acts too much, the U.S. economy will enter a recession.
BlackRock manages $9.6 trillion in assets, making it the largest asset management company in the world. Previously, JP Morgan Chase CEO Jamie Dimon also warned to be ready to meet the “hurricane” because the global economy is facing a series of unprecedented challenges. Goldman Sachs Group President John Waldron agreed with Damon’s view, predicting a more challenging economic situation in the future.