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BlackRock CEO Larry Fink Warns of Looming US Economic Downturn
The head of BlackRock, the world’s largest investment management corporation, has once again voiced his recession warning for the US economy, suggesting it may already be in a state of economic contraction. Larry Fink, BlackRock’s Chief Executive, believes if his evaluation proves accurate, it would represent a considerable setback for US President Donald Trump, who just last week asserted that his trade tariffs would restore America’s prosperity.
Recession Imminent, Says Fink
When questioned by CNBC about the possibility of the US experiencing negative growth, Mr. Fink stated, “I believe we are very near, if not already within, a recession… I think the prevailing uncertainty is causing widespread hesitation. Everyone is awaiting further developments.”
“I anticipate a general economic deceleration until greater clarity emerges. The current 90-day suspension of reciprocal tariffs implies a prolonged period of heightened uncertainty,” he added.
The BlackRock CEO’s remarks followed President Trump’s announcement of a temporary halt to tariff increases on goods from numerous nations, which will still be subject to a 10% levy. He made comparable statements several days prior. Mr. Trump has characterized the US economic situation as a period of transition.
Trade Tensions with China Persist
However, the US leader did not extend this tariff reprieve to China, with whom the United States is engaged in a trade conflict characterized by escalating tariff rates from both sides. Currently, US tariffs on Chinese products stand at 145%, while China’s levies on US goods are at 125%.
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Wall Street Volatility and Treasury Bond Concerns
Mr. Fink’s economic assessment concludes a week marked by fluctuations in Wall Street stock indices, reflecting anxieties that the intensifying trade dispute between the world’s two largest economies could precipitate a global economic slowdown.
Furthermore, prices for long-term Treasury bonds, essentially US government debt instruments, have also decreased, diverging from historical patterns. Treasury bonds have traditionally been regarded as among the safest investments globally.
The decline in Treasury prices has conversely driven their yields upwards, as investors demand greater returns to compensate for perceived risk.
Elevated yields exert downward pressure on the stock market and contribute to increased rates for mortgages and other loans for US households and enterprises. This, in turn, can impede economic growth.
Consumer Sentiment Plummets to Pandemic-Era Lows
Concurrently, consumer sentiment in the US has experienced a significant downturn this month, marking the fourth consecutive month of decline.
Initial readings from the University of Michigan’s widely monitored consumer sentiment index revealed an 11% monthly drop to 50.8, reaching its lowest point since the peak of the Covid-19 pandemic. Over the past year, consumer sentiment has plunged by 34%.
“Pervasive and Unanimous” Decline in Confidence
Joanne Hsu, the survey director, described the decrease as “pervasive and unanimous” across demographics, encompassing age, income, education, region, and political affiliation.
Rising Unemployment Expectations
The proportion of respondents anticipating increased unemployment in the coming months has risen for the fifth consecutive month, reaching levels not seen since the Great Recession of 2009.
White House Defends Tariff Policy
White House press secretary Karoline Leavitt urged Americans to maintain confidence in President Trump as he implements his tariff strategy.
Speaking to reporters, she stated, “As he indicated, this will be a period of transition. He encourages consumers to trust in him, and they should trust in him.”
President Trump asserted on his Truth Social platform: “Our TARIFF POLICY is progressing exceptionally well. Very promising for America, and the World!!! It is advancing rapidly.”