HOLY SH*T! Larry Fink Just Revealed the Truth About the Economy
Apr 9, 2025
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Leading CEOs warn of a looming recession, echoing concerns that America might already be in one. Critical bond market signals align with these fears, showing signs of distress. Consumer credit data adds to the uncertainty, indicating potential liquidations ahead. Predictions shift as economists adjust GDP growth forecasts and elevate recession probabilities, analyzing the Federal Reserve's influence on market dynamics. The airline industry, in particular, appears vulnerable amidst these economic strains.
Larry Fink emphasizes that U.S. CEOs widely believe the economy is already in a recession, reflecting growing business leader concerns.
Recent consumer credit data shows distress, indicating reduced spending and increasing delinquencies, which highlight serious economic stability issues.
Deep dives
Rising Recession Probabilities
America's CEOs are increasingly convinced that the U.S. economy is currently in a recession, with BlackRock’s CEO Larry Fink highlighting the growing belief among business leaders that a significant downturn is already underway. This shift in sentiment is echoed by the Treasury market's inflation expectations, which have plummeted to multi-year lows, reinforcing fears of an economic contraction. Notably, Goldman Sachs has also raised its recession probability estimates, adjusting their GDP growth forecasts downward, indicating a heightened awareness of economic fragility. As consumer credit tightening and weaker market conditions emerge, these factors contribute to a consensus that the likelihood of a recession is significantly higher than just weeks ago.
Impact on Consumer Economy
The consumer economy is showing signs of distress, particularly evident from recent data on consumer credit, which reflects a decline for the first time in recent months. This not only indicates reduced consumer spending but also highlights rising delinquencies and lenders' reluctance to extend credit, suggesting serious concerns about economic stability. Fink cites the airline industry as a leading indicator of economic health, with executives reporting worsening conditions and revising outlooks downward. This broader slowdown across various sectors points to a dangerous trend that may further amplify recession risks as consumer sentiment weakens.
Market Adjustments and Expectations
Market reactions to rising recession fears have led to significant sell-offs and liquidity issues, as investors adjust their positions based on the increasing probability of economic downturns. Historical data indicates that anything below 1.3 percent GDP growth typically aligns with economic recession, and recent forecasts from Goldman Sachs highlight a dire prediction of just 0.5 percent growth. The shift in how markets view interest rates also reflects a deeper concern, with expectations for rate cuts increasing as economic conditions deteriorate. Overall, the combination of these factors suggests that the possibility of a recession is moving from a distant concern to a present reality, influencing market behaviors across the board.
Downgrades are coming in from all over the place, this one from America's top CEOs. Worse than that, critical segments of the bond market wholeheartedly agree with the increasingly dire assessments, making multiyear lows of their own. Moreover, the latest data on consumer credit fans the flames of ongoing liquidations.
Eurodollar University's Money & Macro Analysis
CNBC CEOs think the U.S. is ‘probably in a recession right now,’ says BlackRock’s Larry Fink https://www.cnbc.com/2025/04/07/ceos-think-the-us-is-probably-in-a-recession-right-now-says-blackrocks-larry-fink.html
