BlackRock CEO Fink Warns Economic Slowdown Could Lead to 20% More Losses in Stock Markets
BlackRock CEO Fink Warns Economic Slowdown Could Lead to 20% More Losses in Stock Markets
BlackRock CEO Larry Fink has provided a cautious outlook on the global equity markets, warning that the recent market recovery may not signal the end of the downturn. Despite a modest rebound in global stocks, Fink highlighted the potential for further declines if recession fears in the United States worsen.
In his remarks at the Economic Club of New York on Monday, Fink stated, “Most CEOs I talk to would say we are probably in a recession right now.” He explained that high U.S. tariffs are contributing to rising prices and inflation, which in turn is dampening overall market sentiment.
Although global equities saw some recovery on Tuesday, Fink cautioned that the worst may still lie ahead. “That doesn’t mean we can’t fall another 20% from here too,” he remarked, signaling ongoing concerns over the market’s trajectory.
In the midst of fluctuating market conditions, U.S. S&P 500 futures rose 0.9% on Tuesday after the index closed Monday with a 0.2% loss. The market saw dramatic shifts as investors reacted to mixed trade signals. A report suggesting President Donald Trump was contemplating a 90-day pause on tariffs for all countries except China gave a brief boost to the market, but the White House quickly dismissed the report as “fake news.”
The market downturn began the previous week after Trump announced new tariffs, followed by the threat of an additional 50% tariff on Chinese imports. As a result, the S&P 500 has dropped nearly 20% from its February peak.
In the bond market, Treasury yields continued their sharp recovery. The 10-year yield rose by six basis points to 4.216% on Tuesday after surging 17 basis points the previous day, marking a rebound from six-month lows. The U.S. dollar slightly weakened against a basket of six major currencies after a 1.2% rally over the past two days.
Fink, who was one of the first major Wall Street executives to publicly address the market turbulence, suggested that the recent pullback could offer long-term investment opportunities. However, he also emphasized that the impact is already being felt across the U.S. economy. “The reality is 62% of Americans now invest in equities – the market impact is affecting Main Street,” Fink said. “It’s going to freeze more and more consumption; I think we’re going to start seeing that really quickly.”
Fink added that the Trump administration could help mitigate declining consumer spending by adopting deregulation and pro-growth policies, such as supporting mergers among major U.S. banks. He also dismissed the notion that the Federal Reserve would take aggressive action to ease the situation. “I don’t believe we’re going to see four or five rate cuts this year,” he stated.
Looking ahead, Fink expressed concerns about the potential erosion of the U.S.’s status as the world’s top capital market. He also noted that BlackRock’s proposed deal with Hong Kong-based CK Hutchison to acquire key ports near the Panama Canal may face a lengthy regulatory review, potentially taking another nine months.
Fink described the deal as commercially driven, not politically motivated, and he expressed optimism about its approval after discussions with U.S. policymakers.
