When you lose Larry Fink, you know you’re in for some trouble.
To hear Fink explain it, the White House is baking into the equation a pretty deep recession since it is forcing the Fed to raise rates even more than it should have to — 75 basis points at its next meeting and maybe several more times after that — because the administration doesn’t want to stop the inflationary cycle it helped create through spending.
Fink also scoffed at the White House spin that the economy is experiencing a “growth recession” since the past two quarters of negative GDP growth coincides with strong employment. “I heard that, too,” he snapped. Like most Wall Street pros, he knows employment is a lagging indicator as the gears of the economy start to grind slower. All the spending, he adds, “just makes it harder for our central banks and the other central banks to move the dial [on inflation]. They have to be more aggressive. Then could it lead to a recession? Yes.”
Fink stresses that all the fiscal spending we’ve seen in recent years is a “bipartisan” problem, and he follows the Dem party line that other factors such as the Ukraine war are . Some spending was necessary during the COVID lockdowns. Plus the Fed continued to print money until inflation proved “non-transitory.”Still, it’s hard even for Fink to avoid the fact that Sleepy Joe and his minions haven’t let up despite a post-pandemic recovery. And the Fed, according to Fink, has no choice but to slam the breaks orAgain, Fink is no GOP operative, and ex-BlackRock executives hold plenty of top positions in the Biden administration.
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