Odaily News BlackRock CEO Larry Fink shared his thoughts on U.S. interest rates, saying that while a rate cut is possible in the near term, the Federal Reserve could also raise rates if the economy continues to perform strongly.
Speaking at the World Economic Forum in Davos, Switzerland, Fink acknowledged that there is a strong chance of rate hikes beyond next year, but stressed that this is not his main forecast. He highlighted several key factors that could lead to persistent inflation, such as labor shortages and rising wages. While rising wages are generally seen as a boon for workers, Fink noted that it could also fuel inflationary pressures. He further noted that shortages of materials, especially in industries related to large-scale infrastructure and energy transitions, could exacerbate these inflationary trends.
He also talked about the bond market, saying that the yield curve has returned to normal after a period of inversion caused by high inflation. But he warned that future inflation expectations could cause the yield curve to steepen further. Globally, Fink expressed concerns about rising deficits and debt levels, noting that these factors could push up financing costs and push up long-term bond yields.
Overall, Fink painted a picture of a strong economy, citing solid corporate earnings and upbeat labor market data. While he doesn't expect the Fed to cut rates immediately, he said further data in the coming months will be key to whether the Fed eventually raises rates again.