The head of BlackRock, the world’s largest asset manager, has warned that the US may already be in a recession as trade tensions with China intensify.
Larry Fink, BlackRock’s chief executive, said economic growth is likely to stall until greater clarity emerges, just hours after China announced a steep increase in tariffs on American imports to 125%.
“I think we’re very close to, if not already in, a recession,” Fink told CNBC. “Until we have more certainty, we’re going to see a broad-based slowdown. The 90-day extension on reciprocal tariffs only prolongs the uncertainty.”
Financial markets ended the week in turmoil, with the US dollar tumbling and Treasury yields climbing amid growing fears over the health of the US economy.
JP Morgan CEO Jamie Dimon echoed the concerns, warning that the US faces “considerable turbulence” and predicting many Wall Street firms will be forced to abandon their earnings forecasts due to the instability.
The dollar saw sharp losses against major global currencies. It dropped as much as 2.1% to a three-year low against the euro, which rose above $1.14. Sterling also rallied, climbing 1.2% to over $1.31, marking the dollar’s worst four-day performance in two years.
US government borrowing costs continued to rise, with the yield on 10-year Treasuries hitting its highest level since February.
“The question of a potential dollar confidence crisis has now been definitively answered — we are experiencing one in full force,” said Francesco Pesole of ING.
Nomura strategist Naka Matsuzawa added, “There’s a deeply worrying loss of confidence among investors in the US right now.”
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