BlackRock Argues Federal Reserve Is Not Maintaining Balance Between Cutting Inflation, Avoiding Downturn | Eastern North Carolina Now

    Publisher's Note: This post appears here courtesy of the The Daily Wire. The author of this post is Ben Zeisloft.

    Asset management company BlackRock contends that the Federal Reserve is not effectively maintaining a balance between reducing inflation and avoiding a downturn amid widespread pressure to control higher prices.

    Year-over-year inflation reached 8.5% in July 2022, according to data from the Bureau of Labor Statistics, with a slight moderation from the 9.1% reading in June 2022 driven by lower energy prices - even as costs for food, new vehicles, medical care, and shelter continue to rise. Federal Reserve Chair Jerome Powell said during a hawkish speech at the central bank's recent symposium in Jackson Hole, Wyoming, that policymakers are willing to "bring some pain" in their efforts to combat inflation.

    BlackRock analysts, therefore, said in a market commentary that the central bank's policies have been too aggressive. "We think they're not prioritizing economic implications over pressure to curb inflation," they remarked. "It seems they do not intend, for now, to manage the sharp trade-off between inflation and growth. That's a big deal. We think getting inflation back to central bank targets means crushing demand with a recession. That's bad news for risk assets in the near term."

    To stimulate the economy after COVID and the lockdown-induced recession, the Federal Reserve pegged a near-zero target interest rate and began buying $120 billion in assets each month - policies intended to lower the cost of borrowing while increasing the amount of liquidity in the economy. With the rollback of loose monetary policy, however, the cost of borrowing increases, introducing constraints upon business activity and consumer spending.

    BlackRock CEO Larry Fink noted during an interview with Fox Business that "very large" fiscal stimulus packages in the United States and Europe render central bankers' work to manage inflation "much harder."

    "We have a disconnect between what policy is being proposed and what the responsibilities of these central banks are," Fink commented. "We've created policies that are very inflationary."

    President Joe Biden recently signed the Inflation Reduction Act - a $740 billion package that includes $369 billion in climate spending. Though administration officials have claimed that the bill decreases the federal deficit, Fink said that "whatever deficit reduction" produced by the law has been offset by other policy proposals.

    Fink also acknowledged that the United States is "technically" in a recession given "raw" economic statistics, although economists in the White House have rejected such claims. The United States met the rule-of-thumb definition of a recession - two consecutive quarters of negative growth - last month as the economy shrank at a 1.5% annualized rate in the first quarter and contracted at a 0.6% pace in the second quarter.

    BlackRock has played a pivotal role in encouraging a shift to renewable energy through its embrace of the environmental, social, and governance (ESG) movement. As California faces rolling blackouts and the European Union responds to soaring electricity prices, Fink appeared to acknowledge that a "long-term transition" to green power sources is necessary.

    "We do believe investing in infrastructure is going to be a good alternative," he commented. "Investing in water, investing in gas, investing in hydrogen - these are all going to be great long-term investments for retirees."

poll#162

In what may be the most divisive period in modern American History, even more divisive than the turbulent sixties due to today's lack of patriotism, consider what are the major catalysts causing so much of this calamity of conflict, and vote: What most instigates the division of America, on this day September 20, 2022?

  Racism within our society

  Sex realignment to the detriment of our society.

  Biden /Harris Wide Open Southern Border Policy for the Demographic Upheaval of OUR Constitutional Republic

  Rampant Crime in Democratic controlled cities, and the possible contagion elsewhere

  Covid Pandemic, and its mishandling at the political, and bureaucratic levels.

  The unresolved questions /allegation regarding the flawed 2020 General Election

  January 6th Riot or "Armed Insurrection", depending upon patriotic perspective

  Joe Biden as Divisive Leader; Ineffective and Corrupt Executive

  Failed Education Industry, from an overall perspective, regarding all levels of education.

  Propagandistic Media in complete conflict with the First Amendment's guarantee of Freedom of Speech, and the awesome responsibility of a Free Press..

  "Orangeman Bad!"

  Bureaucracy rushing to a behemoth size, its unjustified expense, and far too often overreach.

  The Weaponized Deep State for political purposes

  A secular ambivalence to all that is real.

  Record number of overdose deaths from opioids and now Fentanyl

  Biden Administration's disastrous Foreign Policy

  Bidenflation /supply chain failure inevitably evolving into stagflation and recession.

  "Ultra MAGA Extremists" freely speaking louder AND LOUDER!

927 total vote(s)     What's your Opinion?

poll#154

Inarguably, the policies of the Democrats in congress and Joe Biden as the Executive is plunging the United States into a recession, if we are not already there; a recession that was completely avoidable. Will abrupt changes in policies occur in time?

  Yes, the Democrats have a bold plan, yet to be revealed, to save us.

  No, there will have to be a complete undoing of the damage done by these Democrats.

  I can't do simple math, so how am I to understand the concept of basic economics.

1,216 total vote(s)     What's your Opinion?