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%.

BEIJING — China is emphasizing its willingness to negotiate as increased tariffs on exports to the United States may soon become a reality.

U.S. President Donald Trump said this week he may increase duties on Chinese goods by 10% as soon as Feb. 1. The White House on Monday also announced plans to investigate China over actions harmful to U.S. commerce.

China’s Ministry of Commerce has always maintained communication with “relevant” U.S. authorities on economy and trade, ministry spokesperson He Yadong said in response on Thursday.

“The Chinese side hopes that under the strategic guidance of the two heads of state, both sides will … strengthen dialogue and communication, properly manage differences, expand mutually beneficial cooperation and promote the stable and healthy development of China-U.S. economic and trade relations,” He added during a weekly press conference. That’s according to a CNBC translation of his Mandarin-language remarks.

Trump said last week that he spoke with Chinese President Xi Jinping over the phone about TikTok and trade. The Chinese side’s readout did not mention the social media app, but said Xi called for cooperation and cast the two countries’ economic ties as mutually beneficial.

“Tariffs are not conducive to China or the U.S., or the entire world,” commerce spokesperson He said.

“China is willing to work with the U.S. to push bilateral economic and trade relations in a stable, healthy and sustainable direction,” He said, noting that was on the basis of “mutual respect, peaceful coexistence and win-win cooperation.”

The comments echoed those of China’s Foreign Ministry spokesperson Mao Ning on Tuesday.

“We stand ready to maintain communication with the U.S., properly handle differences, expand mutually beneficial cooperation and pursue a steady, sound and sustainable development of China-U.S. relationship,” Mao said when asked about negotiations over tariffs.

“China will also firmly defend its own interests,” she said. That’s according to an official English-language transcript.

Even if 10% tariffs are imposed on China, that’s far lower than the original 60% that Trump had floated during his campaign.

Hours after his inauguration on Monday, Trump reiterated plans for 25% tariffs on Mexico and Canada, without specifying a figure for China. He said only that increased duties might be used to force Beijing-based ByteDance to sell social media app TikTok, whose future availability in the U.S. is now in question.

When asked about TikTok on Thursday, Chinese commerce spokesperson He said China “hopes the U.S. side will listen more to the voices of businesses and the public,” and “do more things that are conducive to economic and trade cooperation between China and the United States and the well-being of the people.”