BlackRock CEO: If the economy continues to perform strongly, the Fed may raise interest rates

Odaily reported that BlackRock CEO Larry Fink shared his views on US interest rates, stating that while a rate cut may be possible in the near term, the Federal Reserve could also raise rates if the economy continues to perform strongly. Fink acknowledged in his speech at the World Economic Forum in Davos, Switzerland, that the possibility of rate hikes after next year is high, but he emphasized that this is not his main forecast. He highlighted several key factors that could lead to persistent inflation, such as labor shortages and wage increases. While wage increases are often seen as beneficial for workers, Fink pointed out that they could also exacerbate inflationary pressures. He further noted that material shortages, particularly in industries related to large-scale infrastructure and energy transitions, could exacerbate these inflationary trends. He also discussed the bond market, stating that the yield curve has normalized after a period of inversion caused by high inflation. However, he warned that future inflation expectations could lead to a further steepening of the yield curve. Globally, Fink expressed concerns about rising deficits and debt levels, noting that these factors could push up financing costs and increase long-term bond yields. Overall, Fink painted a picture of a strong economy, citing robust corporate earnings and optimistic labor market data. While he expects the Federal Reserve not to cut rates immediately, he stated that further data in the coming months will be key to whether the central bank raises rates again.