Is the worst of the stock market crash over? How sustainable is global stock market recovery rally? Don’t get your hopes up, cautions BlackRock‘s CEO Larry Fink! The veteran has reportedly said that there is a possibility of another 20% decline in markets.
Larry Fink indicated that share prices might experience an additional 20% decline, as substantial US tariffs cause investors to worry the US economy is contracting.
“Most CEOs I talk to would say we are probably in a recession right now,” Fink stated at the Economic Club of New York on Monday according to a Reuters report. He noted that the tariffs would result in price increases, fueling inflation.
Nevertheless, the CEO of the globe’s biggest asset management firm maintained that the share market’s decline following Wednesday’s tariff announcement presented a favourable long-term investment prospect rather than a reason to sell, and did not present systemic dangers.
“That doesn’t mean we can’t fall another 20% from here too,” he remarked.
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US S&P 500 futures increased by 0.9% on Tuesday, following the benchmark index’s 0.2% decline in a volatile Monday session. The market experienced significant fluctuations as investors processed mixed trade signals.
Markets briefly rose on reports of President Donald Trump considering a 90-day tariff suspension for all nations except China, but the White House later rejected this as “fake news.”
After Trump indicated an additional 50% tariff on Chinese goods, the S&P 500 neared a 20% decline from its February peak.
Fink highlighted that market downturns affect ordinary citizens and influence their purchasing behaviour.
“The reality is 62% of Americans now invest in equities — the market impact is impacting Main Street,” he was quoted as saying by Reuters. The turmoil “is going to freeze more and more consumption, I think we’re going to start seeing that really quickly.”
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He dismissed the likelihood of the Federal Reserve implementing four or five interest rate reductions this year, considering inflation projections.
He suggested that the Trump administration could help offset declining consumption through deregulation and growth-oriented policies, including backing consolidation amongst major American banks.
The BlackRock chief executive voiced worries about America potentially losing its position as a leading capital market.
