BlackRock’s Larry Fink: ‘The [Inflation] Genie May Be Coming Out of the Bottle’

EISEN Larry I feel ░░░░░░░░ I keep reading headlines ░░░░░░░░ Fink warns of inflation ░░░░░░░░ re not done with ░░░░░░░░ Larry s very worried ░░░░░░░░ inflation Why FINK I ░░░░░░░░ not terribly worried But ░░░░░░░░ But do you think ░░░░░░░░ market s being too ░░░░░░░░ about the inflation story ░░░░░░░░ No I think the ░░░░░░░░ market is the best ░░░░░░░░ of what s going ░░░░░░░░ in the world It ░░░░░░░░ the barometer for every ░░░░░░░░ for every central bank ░░░░░░░░ really informs us every ░░░░░░░░ where the mood of ░░░░░░░░ global economy And I ░░░░░░░░ the bond market is ░░░░░░░░ that inflation may be ░░░░░░░░ than we think The ░░░░░░░░ may be coming out ░░░░░░░░ the bottle And I ░░░░░░░░ at this in so ░░░░░░░░ different ways that if ░░░░░░░░ just think about AI ░░░░░░░░ a minute in the ░░░░░░░░ States right now data ░░░░░░░░ represent about 50 gigawatts ░░░░░░░░ power And in the ░░░░░░░░ States we re estimating ░░░░░░░░ data centers will represent ░░░░░░░░ need 300 gigawatts of ░░░░░░░░ in the next five ░░░░░░░░ to meet the needs ░░░░░░░░ we re talking about ░░░░░░░░ know if you expand ░░░░░░░░ throughout the world this ░░░░░░░░ my optimism about growth ░░░░░░░░ at the same time ░░░░░░░░ actually are going to ░░░░░░░░ labor shortages which is ░░░░░░░░ to be driving up ░░░░░░░░ I think we re ░░░░░░░░ to see more persistent ░░░░░░░░ you know and some ░░░░░░░░ that may be a ░░░░░░░░ outcome but we it ░░░░░░░░ going to be an ░░░░░░░░ outcome We re going ░░░░░░░░ have material shortages with ░░░░░░░░ this building out And ░░░░░░░░ I think we are ░░░░░░░░ complacent that that inflation ░░░░░░░░ hit us again But ░░░░░░░░ would also say if ░░░░░░░░ look at where the ░░░░░░░░ the bond market was ░░░░░░░░ a year and a ░░░░░░░░ ago when we were ░░░░░░░░ very elevated inflation we ░░░░░░░░ a very inverted yield ░░░░░░░░ The short rates were ░░░░░░░░ than the long rates ░░░░░░░░ we are seeing now ░░░░░░░░ this is the normalizing ░░░░░░░░ the yield curve but ░░░░░░░░ also believe we re ░░░░░░░░ to have a much ░░░░░░░░ steeper yield curve And ░░░░░░░░ s that s a ░░░░░░░░ of forward inflation expectations ░░░░░░░░ and so one of ░░░░░░░░ fears is because of ░░░░░░░░ complacency and I have ░░░░░░░░ even said the most ░░░░░░░░ word that s facing ░░░░░░░░ that s called the ░░░░░░░░ and the debt of ░░░░░░░░ many countries when you ░░░░░░░░ about the amount of ░░░░░░░░ that we re going ░░░░░░░░ need to be financing ░░░░░░░░ these amazing transformations we ░░░░░░░░ growing deficits worldwide The ░░░░░░░░ of financing those deficits ░░░░░░░░ going to go up ░░░░░░░░ think the yield curve ░░░░░░░░ showing you that FINK ░░░░░░░░ Yeah FINK And so ░░░░░░░░ know I ve said ░░░░░░░░ here in Davos I ░░░░░░░░ see a scenario I ░░░░░░░░ not calling for it ░░░░░░░░ I can t see ░░░░░░░░ scenario where we have ░░░░░░░░ 5 5 percent 10 ░░░░░░░░ EISEN And really quickly ░░░░░░░░ you think the Fed ░░░░░░░░ done cutting rates this ░░░░░░░░ FINK No they they ░░░░░░░░ still have room to ░░░░░░░░ That will create a ░░░░░░░░ steepening of the yield ░░░░░░░░ So I I think ░░░░░░░░ next few months of ░░░░░░░░ and information will identify ░░░░░░░░ I would say to ░░░░░░░░ the economy is very ░░░░░░░░ It was very strong ░░░░░░░░ the fourth quarter And ░░░░░░░░ evidence that we are ░░░░░░░░ from different corporations that ░░░░░░░░ is strong already in ░░░░░░░░ first quarter And so ░░░░░░░░ have and you see ░░░░░░░░ in the labor statistics ░░░░░░░░ so they may pause ░░░░░░░░ another period of time ░░░░░░░░ they may ease a ░░░░░░░░ bit I m not ░░░░░░░░ about the short term ░░░░░░░░ but over the next ░░░░░░░░ if all this materializes ░░░░░░░░ know could they revert ░░░░░░░░ go back up Possibly ░░░░░░░░ Rate hikes FINK A ░░░░░░░░ hike I m not ░░░░░░░░ for that but all ░░░░░░░░ m saying is I ░░░░░░░░ probabilities of that EISEN ░░░░░░░░ FINK That s not ░░░░░░░░ core prognostication EISEN I ░░░░░░░░ trying to get a ░░░░░░░░ here Larry FINK Yeah ░░░░░░░░ m trying to avoid ░░░░░░░░ EISEN: “Very good.”