- BlackRock’s Larry Fink is not on the side of the “inflation is transitory” debate.
- “I do not believe inflation is going to be transitory,” he said, after consumer prices rose at their fastest since 2008.
- BlackRock clients aren’t interested in bitcoin and are more driven by long-term returns, he said.
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BlackRock CEO Larry Fink told CNBC on Wednesday he doesn’t believe the surge in inflation gripping the world will be fleeting, and the way the Federal Reserve and other central banks navigate this environment will have great significance.
“I do not believe inflation is going to be transitory,” he told CNBC’s “Squawk Box” after consumer prices increased 0.9% in June, far higher than the 0.5% consensus estimate of economists polled by Bloomberg.
Most Wall Street economists and the Fed have stuck to the argument that rising prices will indeed be short-lived.
While Fink said he expects inflation to be more “systematic” over time, he is worried about the delta variant of COVID-19 slowing down parts of Asia and further disrupting supply-chain shortages.
“We are seeing a real disconnect between the countries that have been very vaccinated and moving forward on vaccination, and the countries that have been late in vaccination, but focusing more on isolation,” he said. “Isolation worked before we had a vaccination.”
That could lead to uneven recovery across the world. But with record amounts of monetary stimulus and cash still waiting to be put to work, the growth trajectory is eventually pointing upward, he said.
“I believe the trend line is still going to be upward, maybe not as fast, maybe it’s going to be very moderate for the next six months as we digest how the world is able to handle the Delta variant and the speed in which vaccinations occur throughout the world,” he said.
Fink, who has previously said cryptocurrencies could become a great asset class, said BlackRock is seeing low investor demand for bitcoin.
“That is just not part of the focus on retirement and long-term investors,” he said about demand for cryptocurrencies. “We see very little in terms of investor demand on those types of things, but quite frankly (many) may not come to BlackRock for that type of demand.”
He added BlackRock investors are more focused on building long-term returns over a long period of time, and “we don’t have those conversations.”