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BlackRock’s Fink says that the bond market will tell us where we’re going

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Larry Fink at the 2016 World Economic Forum in Davos, Switzerland.

David A. Grogan | CNBC

BlackRock CEO Larry Fink said President Donald Trump’s efforts to unleash capital in the private sector could have unintended consequences that would hurt the stock market.

“I’m cautiously optimistic. That being said, I have scenarios where it could be pretty bad,” Fink said on CNBC’s “Squawk Box” from the World Economic Forum in Davos, Switzerland. “I believe if it’ll unlock all this private capital, we’re going to have enormous growth. At the same time, some of this is going to create new inflationary pressures. I do believe that’s probably the risk that is not factored into the markets. I think the bond market is going to tell us where we’re going.”

The 72-year-old chief of the world’s largest asset manager said much will depend on how quickly the private sector can put capital to work. Trump has already touted massive private-sector promises to spend in the U.S., the latest example being the Stargate joint venture, where SoftBank, OpenAI and Oracle would invest $100 billion immediately for artificial intelligence infrastructure in the country. Plans call for the project to eventually invest a total of $500 billion.

“There are some very large inflationary pressures that we all have to be aware of,” Fink said. “And depending on how this plays out, there is a scenario where we’re going to have much more elevated interest rates because of inflation. And that’s going to have a very negative impact on the equity market.”

Fink said there is a possibility that the 10-year Treasury yield could retest the 5% level and even reach 5.5% if inflation re-accelerates in a meaningful way. If that happens, Fink said it would “shock” the equity market.

The benchmark 10-year note yield last traded at 4.62%.

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How buy now, payer later apps could be crushing your credit

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Small, everyday purchases like a meal from DoorDash are now able to be financed through eat now, pay later options — a practice that some experts deem “predatory.”

“You’ve got to have enough sense to not follow the urge to finance a taco, okay? You have got to be an adult,” career coach Ken Coleman told “The Big Money Show,” Wednesday. 

“This is predatory, and it’s going to get a lot of people in deep trouble.”

RISKS OF BUY NOW, PAY LATER: ‘TICKET TO OVERSPENDING,’ EXPERT SAYS

klarna, doordash

DoorDash and Klarna are now partnering up to extend buy now, pay later options to consumers. (Reuters, Getty / Getty Images)

Financial wellness experts are continuously sounding the alarm to cash-strapped consumers, warning them of the devastating impact this financial strategy could have on their credit score as some lenders will begin reporting those loans to credit agencies.

Consumers may risk getting hit with late fees and interest rates, similar to credit cards. 

“So your sandwich might show up on your FICO score, especially if you pay for it late,” FOX Business’ Jackie DeAngelis explained.

EXPERTS WARN HIDDEN RISKS OF BUY NOW, PAY LATER

Major players like Affirm, Afterpay, and Klarna have risen to prominence at a time when Americans continue to grapple with persisting inflation, high interest rates and student loan payments, which resumed in October 2023 after a pause due to the COVID-19 pandemic. 

“The Big Money Show” co-host Taylor Riggs offered a different perspective, suggesting that company CEOs have a “duty” to attract as many customers as they want. 

“Unfortunately for me, this always comes down to financial literacy — which I know is so much in your heart about training people to save now by later,” she told Coleman, who regularly offers financial advice to callers on “The Ramsey Show.”

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Coleman continued to come to the defense of financially “desperate” consumers, arguing that companies are targeting “immature” customers. 

“I’m for American businesses being able to do whatever they want to do under the law. That’s fine. But let’s still call it what it is: it’s predatory, and they know who their customers are,” Coleman concluded, “And I’m telling you, they’re talking about weak-minded, immature, desperate people.”

FOX Business’ Daniella Genovese contributed to this report.

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