BlackRock CEO Larry Fink said the market is overpricing multiple rate cuts from the Federal Reserve given the continued growth of the U.S. economy.
“I don’t think there’s going to be any landing,” Fink said. “The forward curve is crazy accommodative. I do think there’s room for further easing, but it’s not going to be as much as the forward curve suggests.”
"There are sectors of the economy that are struggling. There are sectors of the economy that are doing really well. We spend too much time focusing on the segments that are not doing well," he said.
Discussing the outlook for interest rates, Fink said he had a hard time seeing rates fall another 200 basis points because “more of the policies that governments are putting in place tend to be more inflationary than deflationary.”
He expects the U.S. economy to continue growing at a 2%-3% pace, refuting analysts' talk of a soft or hard landing.
Additionally, Fink said infrastructure is an essential component to help stimulate growth in every economy and there is ample capital in the private sector to finance the investment.
He added: “If I look around the world today, I see that almost every country has a problem with inadequate infrastructure, so we need to decarbonise, we need to digitise, we need to move forward, we need to build more and more, and I think that’s a big problem.”
The world’s largest asset manager, which oversees about $10.6 trillion as of June, has been making big moves into infrastructure financing while also expanding into the lucrative asset class of private markets. It has been on an acquisition spree, announcing this year its $12.5 billion purchase of Global Infrastructure Partners, a deal that will close on Tuesday, and buying alternative data provider Preqin.
Last month, BlackRock said it was working with Microsoft and others to seek to raise $30 billion in private equity capital over time to fund the data warehouses and energy infrastructure behind the artificial intelligence boom.
Fink also noted that in addition to the equity portion, they will also raise up to $120 billion in debt related to these data centers.
“Infrastructure is a big part of how we stimulate economic growth, and because of the breadth of the capital markets, we don’t have to rely on federal spending or state spending,” he said in an interview. “There’s plenty of capital in the private sector, and we’re going to be able to finance these new projects. So to me, this is the dawn of a new reality, where we’re going to see an expansion of public and private investment in infrastructure.”
The article is forwarded from: Jinshi Data
