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By Saqib Iqbal Ahmed
NEW YORK (Reuters) – BlackRock Inc CEO Larry Fink has said he does not see inflation as transient and that the U.S. Federal Reserve will have to react to higher inflation numbers.
“I’m not calling for 1970s inflation, but I just think we’re going to have inflation above 2%… probably closer to 3.5% to 4.0%,” Fink said in an interview. to Reuters.
“Does that mean the Federal Reserve will have to change its policy? I think so,” said Fink, who, as the head of the world’s largest asset manager, is considered one of the most successful investors. most influential in the world.
A rapid rise in prices has left investors wondering whether inflation is likely to peak as soon as economies emerge from the cloud of disruption caused by the coronavirus pandemic, or whether higher inflation is here to stay.
Federal Reserve Chairman Jerome Powell has repeatedly stated that higher inflation https://www.reuters.com/business/us-lawmakers-likely-press-powell-feds-hawkish-turn-2021 -06-22 will be transitional, noting that he expects supply chains to normalize and adapt.
“Over the next few years we’re going to focus more on jobs, more on redesigning our manufacturing platforms, our supply chain. These will be a little more inflationary,” said Fink.
One of the main concerns for investors is how an overheating economy amid a faster reopening could force the Fed to reduce its ultra-accommodative monetary policies earlier than expected, seen as favorable to riskier assets.
Fink said that raising the Fed’s interest rates by 50 or 100 would not be “that bad or disrupt the stock market.”
“It’s really about how they implement the changes more than whether they now recognize that inflation may be a little above their target,” he said.
The biggest consumer price hike in the US in 13 years has stepped up investors https://www.reuters.com/article/us-usa-markets-inflation-analysis/analysis-investors-pivot-to- powell-after-more-hot -us-inflation-data-idUSKBN2EJ25T Focus on Federal Reserve messages, with the central bank chairman due to speak to Congress on Wednesday.
(Reporting by Saqib Iqbal Ahmed; Editing by Chizu Nomiyama)
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