The Blubber

Larry Fink on Markets, Tariffs, and AI: “The World is Fine”

BlackRock (NYSE: BLK) Chairman and CEO Larry Fink spoke at the 2025 RBC Capital Markets Global Financial Institutions Conference on Tuesday, offering his outlook on markets amid the global turbulence caused by President Trump’s tariffs.

Despite near-term volatility, Fink remains optimistic about the mid- and long-term potential for stocks.

“The world is fine,” Fink said. “There’s a lot of noise, but the world and the U.S. will get by.”

He encouraged investors to buy on dips, seeing any sharp decline as a buying opportunity.

Tariffs, Trade, and Economic Outlook

While acknowledging that the global trade landscape is being reshaped, Fink believes that tariffs will ultimately be a net positive for the U.S. economy.

• He expects six months of volatility as businesses and governments adjust, but beyond 2025, he believes investors will be glad they stayed in stocks.
• He sees potential new trade agreements with Mexico, Canada, and even China as asymmetric trade opportunities that could benefit investors.

Inflation, Treasuries, and Labor Markets

Fink suggested that markets may be mispricing U.S. treasuries, as he sees higher short-term inflation ahead.

• He pointed to potential labor shortages in agriculture due to deportations of undocumented immigrants, which could push food prices higher.
• After a strong Q4, both consumers and businesses are now pausing, creating short-term disruptions.

However, Fink predicts that in two to three years, technological advancements will have a deflationary effect, helping to stabilize prices.

Europe’s Economic Prospects

Fink sees signs of optimism in Europe, despite a decade of economic stagnation due to heavy regulation.

• He noted increased defense budgets and growth initiatives from European leaders.
• He believes these shifts signal positive momentum for the continent’s economy.

AI: A Deflationary Force and Market Driver

Fink is bullish on AI, viewing it as a key driver of stock prices over the next five years.

“It is very clear to me that U.S. technological advances will continue to drive stock prices higher and create opportunities for investors,” he said.

He believes AI will have deflationary effects, countering inflationary pressures in the long run.

Despite short-term market uncertainty, Fink remains confident in the long-term benefits of innovation and strategic investment.