Larry Fink, chairman and CEO of the world's largest asset management company BlackRock, recently said that the United States is expected to avoid a severe economic recession this year, but high inflation will continue for the foreseeable future.
“I don't think there's going to be a Great Recession," Fink said last Friday. "I'm not sure if we're going to see a recession in 2023, we might have a recession early next year."
The likelihood of a recession depends on the Fed's efforts to fight inflation, Fink said. The Fed has raised the benchmark interest rate nine times in a row, accumulatively raising interest rates by 475 basis points, which is the fastest rate hike since the early 1980s. BlackRock manages $9 trillion in assets.
"It all depends on the path of short-term inflation and the path of the Fed." Fink said. "I believe inflation will remain sticky for longer."
He also expected that the Fed will need to raise interest rates two to three times.
US inflation pressures have recently shown signs of easing after a series of sharp rate hikes over the past year. The consumer price index rose 0.1% in March from the previous month and 5% from a year earlier, a weaker-than-expected increase.
Although the year-on-year increase in CPI was the smallest since June 2021, the current inflation rate is still well above the Fed's target level. Policy makers target an inflation rate of around 2 percent as a healthy and sustainable level of growth.
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