- ORIGINAL NEWS
BlackRock’s Larry Fink sees Fed cutting rates twice this year but missing 2% inflation goal
- SUMMARY
Despite inflationary pressures persisting above the Federal Reserve’s target of 2%, BlackRock CEO Larry Fink anticipates a limited number of interest rate cuts this year.
While the market initially anticipated six cuts, Fink has maintained a more conservative estimate of two.
The Fed has been hesitant to reduce rates without clear signs of inflation easing towards its target.
However, Fink suggests that the central bank’s inflation target may be overly ambitious.
He believes that a stable inflation rate between 2.8% and 3% would be a significant accomplishment.
Inflation has moderated, but Fink expresses doubt that it will reach the Fed’s desired level.
He believes that even if interest rates are reduced, inflation will likely remain elevated.
In his view, a modest inflation target of around 3% should be considered a success.
Fink’s predictions are based on the assumption that the Fed may have to concede that achieving the 2% target is unrealistic.
He argues that a focus on a higher, yet stable inflation rate would allow the Fed to support economic growth without compromising price stability.
- NEWS SENTIMENT CHECK
- Overall sentiment:
neutral
Positive
“Fed officials have expressed reluctance to start cutting until they see more convincing evidence that the pace of price increases is heading back to target.”
Negative
“BlackRock CEO Larry Fink predicted Friday that the Federal Reserve likely will still cut interest rates this year but won’t meet its inflation target.”