Source: Golden Ten Data

BlackRock CEO Larry Fink (Larry Fink) predicts that the Fed will cut interest rates once or twice at most this year, and that the Fed will face difficulties in containing inflation.

Following BlackRock's announcement of first-quarter results, Fink said in an interview on Friday that if US inflation falls between 2.8% and 3% — below the Fed's 2% target, he would regard it as a “success.”

“I think reducing US inflation to 2% is a difficult task,” said Fink, 71. He said, “We have restructured our framework for formulating economic policies.”

Fink believes that the Federal Reserve should “test” after cutting interest rates once or twice to see how the economy reacts to this.

For the past two years or so, Fink has been warning that inflation will continue, and sometimes his expectations for the rate at which the Federal Reserve will cut interest rates are more conservative than the market.

Currently, US inflation has continued for longer than many people's expectations, raising doubts about whether the Federal Reserve will be able to cut interest rates this year. The core consumer price index excluding food and energy rose 3.8% year over year in March, a value higher than economists' expectations.

Furthermore, Fitch said on Thursday that the US economy and labor market are so hot that immigration has helped.

The rating agency wrote, “After the COVID-19 pandemic, the growth of the US workforce was mainly dominated by foreign-born workers. By 2023, they accounted for 19% of the US workforce, up from 17% in 2019. The labor force participation rate for foreign-born children is 66%, which is higher than 62% for native-born people.”

Net immigrants averaged 0.9% of the US population over the past two years, exceeding estimates of 0.3%. However, although the increase in immigration should maintain this year's labor force growth momentum, Fitch also warned that there may be a risk of oversupply. Despite this, Fitch said that the contribution of immigrants to the labor force has significantly boosted economic growth, and previous research has agreed.

In another report released Thursday, Fitch also mentioned a second source driving an impressive labor market: government recruitment.

Olu Sonola (Olu Sonola), head of US economic research, said in the report: “Since most government education institutions maintained a telecommuting system throughout 2020 and kept the number of employees to a minimum, the role of government recruitment did not begin to become apparent until late 2021 after the COVID-19 pandemic. ”

editor/tolk