BlackRock CEO warns: The market is seriously mistaken, the Fed will not cut interest rates so many times!
BlackRock CEO Larry Fink warns that the market's expectations for a significant rate cut by the Federal Reserve are too high, believing that there will not be a substantial rate cut in the future. He points out that the U.S. economy will continue to grow at a rate of 2%-3% and emphasizes the importance of infrastructure investment for economic growth. BlackRock is actively expanding into the infrastructure financing field and is collaborating with companies such as Microsoft to raise funds to support related projects
BlackRock CEO Larry Fink said that considering the continued growth of the U.S. economy, the market has priced in multiple rate cuts by the Federal Reserve too high.
Fink stated: " I don't see any landing. The looseness of the forward rate curve is crazy. I do think there is more room for further easing, but not as much as the forward curve suggests."
He said: "Some sectors of the economy are struggling. Some sectors are doing very well. We have spent too much time focusing on underperforming niche markets."
When discussing the outlook for interest rates, Fink said he finds it hard to see rates falling by another 200 basis points, because "more government policies tend to be inflationary rather than deflationary."
He expects the U.S. economy to continue growing at a rate of 2%-3%, dismissing analysts' views of a soft or hard landing.
Furthermore, Fink stated that infrastructure is a key component to stimulating growth in every economy, with the private sector having enough capital to provide funding for investments.
He added: "Looking around the world today, I find that almost every country has an infrastructure deficit, so we need decarbonization, we need digitization, we need to move forward, we need to build more and more, I think this is a big issue."
As of June this year, the world's largest asset management company manages around $10.6 trillion in assets. The company has been aggressively expanding into infrastructure financing while also expanding into the lucrative asset class of private markets. It has sparked an acquisition spree, announcing a $12.5 billion acquisition of Global Infrastructure Partners, a deal that will be completed on Tuesday, and acquiring alternative data provider Preqin.
Last month, BlackRock said it is working with Microsoft and other companies to gradually raise $30 billion in private equity capital to fund data warehouses and energy infrastructure behind the boom in artificial intelligence.
Fink also noted that in addition to the equity portion, they will also raise up to $120 billion in debt related to these data centers.
In an interview, he said: "Infrastructure is an important part of our economic growth stimulus, and with the breadth of the capital markets, we don't have to rely on federal or state government spending. The private sector has enough capital, and we will be able to fund these new projects. So for me, this is a new dawn of reality, and we will see an expansion of public and private investment in infrastructure."