Larry Fink, the CEO of Blackrock, shared his insights concerning the U.S. economy in an interview with CNBC's "Squawk on the Street" on Friday. Fink does not foretell a major recession in the United States, but instead predicts that “inflation is going to be stickier for longer.” According to Fink, the U.S. is realistically looking at a 4% floor in inflation instead of the 2% benchmark proposed by the Federal Reserve.

Fink additionally notes that different sectors of the economy are weakening or strengthening because of significant fiscal stimuli put into place. Despite the falling of three banks, Fink suggested that it would not have a systemic effect, instilling confidence that the nation’s big banks had performed well. His statement was complemented by his Chief Investment Officer, Rick Rieder, who predicted that the Federal Reserve would increase the benchmark rate to 6% this year.

Given consumers’ growing confidence in the economy, Fink stated that Blackrock is seeing more clients who want to decrease risk, but with a “more holistic and resilient portfolio.” Fink is optimistic about the company’s performance during the past 5 years, noting growing net inflows of $1.8 trillion. He also mentioned that despite all the pessimism, Blackrock has grown more in this first quarter as compared to the first quarter of last year.

Overall, Fink’s assessment of the economic environment reflects confidence that the U.S. will not be facing a major recession nor does he anticipate the central bank’s 2% goal to be met. It appears that inflation will remain high for an extended period, driving up benchmark rates and reconfiguring consumers’ risk-averse behaviors. At this point, Mr. Fink’s predictions have been prioritized by the market, though investors are wise to keep an eye out for any changes in the inflationary environment.



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