The CEO of the world’s largest asset manager was asked if he thinks a recession is coming. Larry Fink’s response: We’re in it.
Most CEOs Fink has been talking to “would say we are probably in a recession right now,” he said in an interview at the Economic Club of New York on Monday.
“One CEO specifically said the airline industry is a “proverbial bird in a coal mine — canary in the coal mine — and I was told that the canary is sick already,” he said, adding that travel demand has declined.
Last week, President Donald Trump introduced tariffs that wiped trillions of dollars in value from the stock market. Trump has made no indication that he will reverse his plans despite the pain they’re causing investors.
The asset management leader raised his concerns about inflation if all of the proposed tariffs were put into effect simultaneously. He said this would make it difficult for the Federal Reserve to cut interest rates, adding there was “zero chance” of multiple rate cuts.
“I’m much more worried that elevated inflation — that’s gonna bring rates up.”
While Fink said he expected the markets could still fall by another 20%, he suggested that the conditions are “more of a buying opportunity than a selling opportunity” in the long run as there are no systemic risks in the financial system.
Longer term, Fink thinks Trump will focus on a growth agenda, like deregulation and tax cuts. “The market is not focusing on these areas,” he said.
Fink said the need to build up infrastructure in the US, especially for AI, is still a major investment theme that needs to play out.
“If you spent time right now with the CEOs of the hyperscalers, Nvidia, and other players, they would say the need is just as great today as it was 3 months ago, and I believe some of the being macro trends are still in place,” he said.
