In a gathering of financial heavyweights at this year’s Davos, BlackRock CEO Larry Fink and JPMorgan CEO Jamie Dimon voiced concerns about the current economic landscape. Drawing parallels with the volatile 1970s, they underscored mounting worries over fiscal deficits, surging inflation, and the disruptive role of populism on supply chains.
Fink expressed concerns about the fragmentation and politicization of supply chains, stating, “That is inflationary.” He pointed out the growing deficit of the U.S., which has ballooned from $8 trillion in 2000 to $33 trillion today, labeling it as “highly inflationary.” Such a stance, alongside the growing interest in hard assets, likely informed BlackRock’s recent move to offer a bitcoin spot ETF, a potential hedge against pervasive inflation.
Stephen Schwarzman, CEO of the Blackstone Group, countered by highlighting a different perspective, revealing zero increase in the input costs for his companies in the third quarter. He surmised, “So it says to me the Fed is actually having a pretty good impact in terms of taking inflation out of the system.” Meanwhile, Noel Quinn, CEO of HSBC, voiced his concerns about a fast-approaching tipping point on fiscal deficits that could hit several economies hard.
Dimon, however, urged the room to be prepared for a possible 100 basis point rise in the whole interest rate curve. His cautionary tone resonated with Fink’s warning of persistent higher interest rates, influenced by
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Author: Jacob Oliver
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