BlackRock CEO Warns of Unintended Consequences from Trump’s Plan to Unleash Capital
BlackRock CEO Larry Fink expressed cautious optimism about President Donald Trump’s efforts to unleash capital in the private sector, but also warned of potentially negative consequences that could hurt the stock market. Speaking at the World Economic Forum in Davos, Switzerland, Fink stated that while he believes the initiative could lead to enormous growth, it could also create new inflationary pressures that may not be factored into markets.
Fink highlighted the risk that the bond market will reveal, saying that he believes the 10-year Treasury yield could retest the 5% level or even reach 5.5% if inflation accelerates. He warned that such an event would “shock” the equity market, given the benchmark 10-year note yield currently stands at 4.62%.
The BlackRock CEO noted that much would depend on how quickly the private sector can put capital to work, citing Trump’s efforts such as the Stargate joint venture, which aims to invest $100 billion immediately in artificial intelligence infrastructure in the U.S., with a total investment of $500 billion planned. Fink emphasized the need for vigilance, stating, “There are some very large inflationary pressures that we all have to be aware of.”
