Larry Fink Predicts the Fed Will Not Cut Interest Rates Much, Warns of Embedded Inflation

BlackRock CEO Larry Fink has expressed the view that the Federal Reserve (Fed) does not plan to significantly lower interest rates in the near future. In a recent interview, he noted that some overly optimistic expectations among analysts and investors may be misguided, as the Fed remains cautious in its actions.

Fink emphasized that the current economic situation requires a careful approach. Despite some signs of slowing inflation, he believes that high inflation levels have become "embedded" in the economy. This means that established habits among consumers and businesses are creating certain price levels, which make it difficult to further reduce inflation without potential consequences.

During the conversation, he also highlighted the importance of recognizing that economic indicators are dynamic and require constant analysis. Market participants must be prepared for the Fed to act more cautiously and slowly than previously expected in response to changes in the economic environment.

Fink also pointed out that key factors contributing to the current inflationary situation are not only demand and supply but also long-term changes in consumer behavior, which may cause a delay in returning to previous price levels.

Thus, Larry Fink urged for a more realistic attitude toward Fed forecasts and noted that many will need to reassess their expectations regarding the central bank's future actions on interest rates.

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