Inflation Driven by Tariffs Tops List of Market Risks, says World’s Biggest Sovereign Wealth Fund CEO
The head of the world’s biggest sovereign wealth fund, Nicolai Tangen, has warned that inflation driven by tariffs poses a significant risk to financial markets in 2025. As the CEO of Norges Bank Investment Management, Tangen emphasized that many of the suggestions emerging from the US, including tariff plans, have the potential to fuel inflation. This, combined with less labor supply and other factors, may make it less likely for inflation to decrease.
Tangen was speaking at the World Economic Forum in Davos, where he flagged several market risks, including higher interest rates for longer periods, high government debt, and geopolitical tensions. However, he emphasized that Trump’s presidency has a positive effect on US companies’ financial outlook.
Tangen led Norway’s massive sovereign wealth fund, which achieved a profit of 1.48 trillion kroner ($138 billion) in the first half of the year, primarily due to investments in technology stocks. Despite concerns about market risks, Tangen acknowledged that many American CEOs he has spoken to are experiencing an increased “animal spirit” as a result of Trump’s presidency.