BlackRock(BlackRock Inc) CEO Larry Fink (Larry Fink) said on Wednesday that he did not think the rise in US inflation was temporary and that the Fed would have to respond to higher inflation data.
"I'm not talking about inflation like it was in 1970," Fink said in an interview. "I just think our inflation rate will exceed 2%. It may be close to 3.5%, 4.0%. "
Does this mean that the Fed will have to change its policy? I think so, "Fink said.
The rapid rise in prices has investors wondering whether inflation is likely to peak soon or continue to rise as the US economy emerges from the clouds caused by the epidemic.
Jerome Powell, chairman of the Federal Reserve, has repeatedly said that the rise in inflation will be temporary, noting that he expects the supply chain to normalize.
"in the next few years, we will see more attention to employment, more attention to reshaping our manufacturing platform, our supply chain delivery. These will further push QualcommBloat, "Fink said.
A major concern for investors is that overheating could force the Fed to scale back ultra-loose monetary policy sooner than expected as the pace of reopening accelerates.
Mr Fink said the Fed raising interest rates by 50 or 100 basis points would not be "that bad or disturbing the stock market".
"what is more important is how they implement [policy] changes than they now realise that inflation may be slightly above target," he said. "
Us stocks have rebounded strongly over the past year since the collapse triggered by the new crown epidemic. Fink believes that the long-term trend in U. S. stocks remains strong.
"I'm not suggesting that the stock market will rise in a straight line, and it may be disappointing in the future," Fink said. But overall, given the scale of fiscal and monetary stimulus, and more importantly, as the amount of cash increases, I believe the trend line will continue to rise. "
The US consumer price index rose the most in 13 years, adding to investors' attention to Fed information. In congressional testimony released in advance on Wednesday, Federal Reserve Chairman Colin Powell said that the US economic recovery has not yet reached the point where it can start to scale back its asset purchases, saying that inflation is likely to remain high in the coming months and then moderate.