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“I am worried about inflation. I don’t think inflation will be transient.
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Larry Fink, who runs BlackRock Inc. BLK,
the world’s largest asset manager, is not convinced by the Federal Reserve’s arguments that inflationary pressures in the United States will subside once supply bottlenecks and other temporary factors resulting from the COVID-19 pandemic will be gone.
In an interview with CNBC, Fink said there had been significant “fundamental” and “fundamental” changes in the way policymakers view inflation. The decades-long focus on keeping prices low for consumers has been superseded by concerns about wage levels and employment.
For its part, BlackRock also plans to increase the base salaries of all employees by 8%, starting in September.
BlackRock reported better-than-expected second-quarter earnings and revenue on Wednesday, with assets under management increasing 30% to $ 9.5 trillion and net inflows topping $ 80 billion. Shares fell more than 3% on Wednesday morning.
On Tuesday, the US consumer price index in June rose more than expected, jumping 0.9%. The inflation rate for the 12 months ended June climbed to 5.4% from 5%. The last time prices rose this quickly was in 2008, when oil hit a record high of $ 150 a barrel.
Federal Reserve Chairman Jerome Powell, in testimony prepared for delivery to a congressional panel, again said on Wednesday that he believes the sharp rise in inflation seen so far this year will fade away .
Fink is not the only Wall Street chief not convinced by the Fed’s expectations that inflationary pressures should prove to be “transient.” JPMorgan Chase & Co. JPM,
Managing Director Jamie Dimon said the bank has an additional cash cushion in anticipation of rising rates and increased inflation.
US stocks were higher on Wednesday, with the Dow Jones Industrial Average DJIA,
up 70 points, or 0.2%, while the S&P 500 SPX,
gained 0.3% and the Nasdaq Composite COMP,
advanced 0.5%.
Inflation nervousness aside, Fink remained optimistic about the outlook for the stock market.
“I’m not trying to suggest it will be a straight up, and there could be some disappointments in the future. But overall, with the amount of fiscal and monetary stimulus, and more importantly with the amount of cash that is looking to be used, I think the trendline is always going to be upward, ”he said. -he declares.
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