- The stock market won't fully rebound in the second half of 2022, according to BlackRock CEO Larry Fink.
- That's because inflation will remain high for years amid supply-chain problems, he told Bloomberg TV.
- He also said the Federal Reserve doesn't have the tools to properly address inflation.
The stock market is unlikely to stage a complete rebound later this year as inflation remains high, BlackRock CEO Larry Fink said.
When asked on Bloomberg TV late Thursday if markets can recoup losses in the second half of the year, he replied, "probably not — not totally."
He noted that markets are recalibrating to tighter monetary policy, with growths stocks seeing most of the downside. Meanwhile, soaring energy and commodity stocks are masking some of the weakness on indexes, he added.
"So if you look at the volatility in the market and the spread between winners and losers, it's pretty broad this year," Fink said.
COVID-related gains from earlier in the pandemic are reversing, and now there's a greater recognition that high inflation will probably linger "for a number of years," he said.
He added that the Federal Reserve is ill-equipped to properly handle the highest inflation in 40 years because most of the issues stem from policy frameworks and supply shocks.
"I believe inflation is based on some big macro policy changes that had good intentions but the unintended consequences are more inflationary," Fink said.
The comments come as the Fed attempts to tackle inflation with an aggressive tightening schedule. Fed Vice Chair Lael Brainard told CNBC Thursday that doesn't see a pause in rate hikes anytime soon.
But the BlackRock chief executive didn't fully echo sentiments of JPMorgan CEO Jamie Dimon, who warned of a "hurricane" on the horizon for markets. Instead, Fink thinks, Wall Street faces a mixed bag of scenarios and could end up holding the current status quo of lackluster performance into 2023.
"I could also see a scenario where we're going to be muddling along for the next year or two right along this level," Fink said. "The one thing I will say with total certainty is we're going to be living with more uncertainty."