BlackRock CEO Larry Fink said on Friday that he expects the Federal Reserve to cut interest rates at least twice this year even if inflation stays above the central bank’s 2% target.
“When everybody said we’re going to have six cuts earlier this year, from noted economists, I said maybe two. I’m still saying maybe two.” Fink said on Friday during an interview on CNBC’s Squawk on the Street.
Fink, who heads the world’s largest asset management firm, made the comment just days after the the U.S. Bureau of Labor Statistics announced that annual inflation grew in March. The bureau’s consumer price index grew 3.5% year-over-year, up from 3.2% in February. The increase was primarily due to higher rent and gas prices. Wall Street had expected a rate of 3.4%.
The higher-than-expected rate sent the the Dow Jones Industrial Average down 500 points during morning trading on Wednesday, as it signaled that the Fed would not be cutting rates anytime soon.
Federal Reserve Chairman Jerome Powell has repeatedly said the the bank would not cut rates until annual inflation hits 2%. On March 29, conference at the Federal Reserve Bank of San Francisco, Powell said he still expected “inflation to come down on a sometimes bumpy path to 2%.”
Fink said on Friday that the bank’s target was unrealistic.
“Inflation has moderated and we’ve always said inflation is going to moderate. But is it going to moderate to that terminal rate the Federal Reserve is looking for? I feel doubtful,” Fink said. “Do I believe that we could get a stable inflation between 2.8% and 3%? I’d call it a day and a win.”