BlackRock CEO Larry Fink It affected the likelihood of a recession and the risk of the US government defaulting on its debt.
Fink told Liz Claman and Charlie Gasparino during “Claman countdownon Friday that “we’re not in a recession yet” but “there’s a good chance we’re going in”. He went on to note several phenomena noted as occurring in Economie.
“We are already seeing the housing market collapse from the peak levels we saw last year,” he said. “It was a vision Car sales We’re starting to drop significantly, and we’re actually starting to see more and more consumers borrowing against their retirement.”
He explained that consumers had “a lot of money” during the height of the COVID-19 pandemic, adding that they didn’t commute to work and “received some federal payments.” This, he said, has been “significantly diminished”.
“Right now, we’re at that point where we’re not in a recession, but if the trajectory continues in that direction – and I think it will be – we’ll be in moderate recessionHe continued, “Certainly, there is no reason for us to fall into a very deep recession. There are too many things going on in our economy for us to be in a deep recession.”
Fink also said he believes Europe will not fall into a “deep” recession due to stable energy prices.
Later in the interview, A.J BlackRock CEO He offered his thoughts on whether there was a risk of the US government defaulting on its debt.
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“Well, if we see a job shortage within Congress, if we don’t have Congress trying to find a way forward, then of course we have that risk,” he said. “I would just urge every legislator to focus on responsibility. We owe our creditors money.”
The United States has more than 31.3 trillion dollars in national debtAccording to the latest data released by the Treasury Department. Fink said its size was “surprising” and represented a “huge risk” if the US “does not act responsibly” and reassure its creditors.
He continued, “We can all talk about what the US budget should be? We can all talk about how we can reduce our deficit in the long run.” “But what used to be considered normative behavior, you know, raises the bar on religion and now it’s become politicized. That’s always a big fear and a big problem.”
Claman later asked Fink if he thought that Federal Reserve It would have to pause or cut interest rates earlier than its current schedule.
The Fed has raised rates several times in 2022, including four consecutive hikes of 75 basis points, and most recently a hike of 50 basis points. In the minutes of the Fed’s December meeting, policymakers indicated that they expect rates to rise to 5.1% in 2023, as previously reported by FOX Business.
BlackRock’s CEO said the central bank is “trying to be apolitical,” adding, “Obviously, if the actions taken by Congress create a more dramatic threat of a deeper recession, they will have to respond to that action.” He assumed that would be a “very bad reaction in the long run”, and would likely lead to more inflation.
He said the Fed should take action based on the data.
“If the economy is upended by congressional action and we have a default, the Fed will have to do whatever is appropriate to stabilize the economy.”
He went on to stress his view of the liability regarding the debt of the United States.
“If you think about the benefits of being the world’s currency, which we are all about energy payments You pay in dollars. “It’s because we are the reserve currency. We need to be a leader in making sure that the reserve currency is the right one, and we deserve that right,” he said.
Fink has stated that “playing Russian roulette, whatever you want to call it” regarding the debt ceiling is “something unimaginable” to him. However, he said the ceiling needed addressing.