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The U.S. economy might already be in a recession, according to BlackRock CEO Larry Fink, who says many corporate leaders are quietly bracing for a prolonged downturn. Speaking at the Economic Club of New York on Monday, Fink shared that a wide range of CEOs—from tech to travel—believe the slowdown is already underway, even if official data hasn’t yet confirmed it.

“Most CEOs I talk to say the U.S. is probably in a recession right now,” Fink stated, noting that a major airline executive described the aviation sector as a “canary in the coal mine”—and that the canary is already “sick.”

His comments come amid rising inflation pressures, global uncertainty, and tariff tensions that are reshaping expectations for the U.S. economy and financial markets in 2025.

Corporate Leaders Sound the Alarm: The Recession May Have Already Started

Fink’s remarks reflect what appears to be a growing consensus in the boardrooms of America’s largest companies. Business leaders are witnessing weakening consumer demand, squeezed profit margins, and rising input costs—all classic signs of a recession.

According to The Conference Board, CEO confidence fell sharply in Q1 2025, with more than 65% of surveyed CEOs expecting worsening economic conditions over the next six months. Additionally, the ISM Manufacturing Index has been in contraction territory for eight consecutive months, reinforcing the view that the slowdown is real and widespread.

“Companies are scaling back on hiring, cutting costs, and delaying capital investments. That’s not optimism—that’s recessionary behavior,” said Diane Swonk, Chief Economist at KPMG.

Tariffs and Inflation: A One-Two Punch to the Economy

Fink also emphasized that President Donald Trump’s renewed tariff strategy could exacerbate inflation, making it more difficult for the Federal Reserve to respond with rate cuts—one of the traditional tools used to cushion economic downturns.

“The idea that the Fed is going to cut rates four times this year? I see zero chance of that,” Fink said. “Instead, we could face elevated inflation, forcing the Fed to keep interest rates higher for longer.”

Indeed, tariff hikes on imports from China, Vietnam, India, and other trade partners are already beginning to drive up costs in consumer electronics, textiles, and food products. The Producer Price Index (PPI) rose 0.6% in February 2025, its largest increase in 12 months.

Markets vs. Reality: The Fed May Not Follow the Script

While Wall Street is still betting on a more accommodative Fed policy, reality may paint a different picture. According to the CME FedWatch Tool, traders expect a full 1 percentage point of rate cuts by the end of 2025—equivalent to four cuts of 25 basis points each.

But Fink believes that’s wishful thinking.

“If inflation stays elevated due to supply chain disruptions and tariffs, the Fed will have its hands tied,” he said. “This isn’t 2020 anymore. The playbook has changed.”

His comments echo similar warnings from former Fed officials like James Bullard, who recently stated that “the Fed should resist market pressure to cut prematurely.”

BlackRock’s Position: Managing $11 Trillion Amid Uncertainty

As the world’s largest asset manager, BlackRock oversees more than $11.5 trillion in assets across public equities, fixed income, private equity, and alternative investments. Fink’s outlook not only reflects internal sentiment at BlackRock but also the macroeconomic views of its institutional clients.

Despite the gloomy economic tone, Fink hasn’t signaled panic. Instead, he’s urging investors to prepare for continued volatility, a slower-growth environment, and rising geopolitical risk, especially as U.S. elections and Middle East tensions add layers of complexity to the global economy.

Brace for a Bumpy Ride

The U.S. economy may not be officially labeled as being in a recession, but the signs are difficult to ignore: contracting industrial activity, cautious corporate spending, rising inflation, and growing executive pessimism.

With inflation still sticky, the Fed constrained, and tariffs returning to the spotlight, investors and businesses alike are facing a year where uncertainty is the only certainty.

As Larry Fink summed it up:

“We may already be in a recession—and this time, the usual tools to fix it might not work.”

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