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Even people who make a living from predicting the markets can’t predict everything. Larry Fink, the longtime CEO of BlackRock (BLK+3.01%), said on a Friday call with analysts that he was surprised by President Donald Trump’s “Liberation Day” tariffs last week.
“The sweeping U.S. tariff announcements went beyond anything I could have imagined in my 49 years in finance,” Fink said on a call after the company reported first-quarter financial results.
On April 2, the president imposed the steepest tariffs the country has seen in over a century — a 10% universal tariff and heavy reciprocal tariffs. This week, Trump announced a 90-day reciprocal tariff pause on countries that hadn’t announced retaliatory duties. Tariffs on China, notably, remain in place; the country is now facing a 145% reciprocal tariff; China has since announced a 125% levy on all U.S. goods.
The markets have been chaotic this month — after Trump’s April 2 tariff announcement, the S&P 500 had its steepest two-day plunge since the onset of the COVID-19 pandemic. The 90-day pause on tariffs sent the markets skyrocketing before coming back down to Earth.
Now, the markets continue to grapple with what the future could look like: What the steep tariffs on China mean for Big Tech, whether the president will continue to be erratic with his trade policy, whether the country is headed for a recession, and more.
“In the short run, we have an economy that is at risk,” Fink said, before adding that artificial intelligence and rising infrastructure demand present significant and “transformative” investment opportunities.
“This isn’t Wall Street versus Main Street,” he said. “The market downturn impacts millions of ordinary people’s retirement savings.”
This morning, BlackRock announced better-than-expected first-quarter results — revenue rising 12% to $5.28 billion and adjusted earnings per share of $11.30, beating analyst expectations of $10.19.
Fink, who has become a billionaire through his role at the helm of the world’s largest asset manager, went on CNBC’s (CMCSA+0.39%) Squawk on the Street on Friday morning to issue a more dire warning about the days ahead.
“I think we’re very close (to), if not in, a recession now,” he said. “I think you’re going to see, across the board, just a slowdown until there’s more certainty. … We now have a 90-day pause on the reciprocal tariffs — that means longer, more elevated uncertainty.”
Fink said the current economic crisis “is not a pandemic, this is not a financial crisis, this is something that we have created.” He added that the U.S. is now a “global destabilizer.” His comments Friday echo what he said earlier this week: that the U.S. is headed for a global slowdown and that the country’s economy is “weakening as we speak.”
Fink told CNBC, “Long term, I’m less worried about some of these issues, but in the short run, I’m petrified about some of these issues.”