BlackRock’s Fink says market is wrong on Fed rate-cut bets

Published On Oct 1, 2024, 5:02 AM

Larry Fink, CEO of BlackRock, stated that the market is overly optimistic about possible interest rate cuts from the Federal Reserve, suggesting that the current economic situation in the U.S. does not support such a significant reduction in rates. He noted that while there are areas of the economy struggling, many sectors are performing well. Fink emphasized that the anticipated cuts in rates by the market are excessive given the ongoing growth in the economy and inflationary pressures. He believes that corporate earnings remain strong, and that current risks in the market are more diffuse than before, indicating a lower systemic risk in the capital markets.

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Stock Forecasts

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Negative

Given Fink's insights into the overpricing of rate cuts, the financial sector may react negatively if the market corrects its expectations on interest rate cuts. stocks like JPMorgan Chase (JPM) may face downward pressure as higher rates may offset their lending revenues.

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