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BlackRock CEO Larry Fink said he was expecting the US Federal Reserve to cut rates by at least 25bps next week, but the proportion of people who benefit from high rates is increasing as the population ages.
Fink was speaking at the Future Investment Initiative (FII) in Riyadh, Saudi Arabia.
American mortgages are more often than not fixed for 30 years, which means interest rates also do not impact the largest asset of many households, their home, he said.
While he said an interest rate cut was to be expected, Fink said he did not expect rates to fall as fast as many are forecasting.
“Historically, we have been consumer driven economies and considered the cheapest products the best. Today, we have policies that have embedded inflation, such as onshoring, but at what cost?
“We are not going to see interest rates as low as people are forecasting,” he said.
The largest macro trend in the world today is the amount of capital needed to digitise and decarbonise and rebuild infrastructure, amounting to trillions of dollars, he added.
(Reporting by Imogen Lillywhite; editing by Seban Scaria)
