Larry Fink, CEO of BlackRock, the world's largest asset management company, does not believe that US interest rates will fall soon.
Fink stated at the Future Investment Initiative (FII) meeting held in Riyadh, Saudi Arabia on Tuesday (October 24th) that the Federal Reserve may keep interest rates high for a long period of time.
Even Fink believes that the growing deficit in the United States is leading to higher inflation, indicating the need for the Federal Reserve to consider further interest rate hikes.
The growth rate of US government spending is far faster than the growth rate of income, year after year, "debt has grown by over $1 trillion annually in the past 23 years," Fink pointed out.
In addition, the CEO also listed a long list of economic challenges, such as increasing populist pressure leading to faster policy changes, and the supply chain becoming politicized.
Fink said this is reminiscent of the "bad policies" of the 1970s.
In the 1970s, after the initial decline in inflation rates in the United States, Arab countries imposed oil embargoes on the United States and other Western countries, leading to a second and more intense round of inflation in the late 1970s and early 1980s.
Earlier, Alejandra Grindal, the chief economist of Ned Davis Research Inc. in the United States, and research analyst London Stockton, by comparing CPI charts, also found that the overall inflation trajectory in the United States is "very similar" to that of more than forty years ago.
When asked if there will be a hard landing or a soft landing in the US economy every year, Fink stated that neither will happen. He stated that fiscal stimulus is still having an impact on the economy through measures such as infrastructure spending under the Chip Act and the Inflation Reduction Act.