BlackRock CEO Larry Fink said stock markets could extend their decline by 20% as the US imposes steep tariffs, citing worries across Wall Street that the economy is probably already in contraction.
Fink joined a chorus of prominent voices in the business community raising concerns that the US economy may already be slipping into a recession — a downturn directly linked to President Trump’s controversial trade policies.
“Most CEOs I talk to would say we are probably in a recession right now,” Fink, who heads the world’s largest asset manager, stated bluntly during an event at the Economic Club of New York on Monday.
He said recent stock market weakness was “more of a buying opportunity than a selling opportunity,” in the long run, and did not pose systemic risks.
“That doesn’t mean we can’t fall another 20% from here too,” Fink said.
Fink’s comments underscore growing alarm among top executives after Trump’s sweeping announcement of new tariffs last week triggered panic across global markets, sending the S&P 500 down 10% in just two trading sessions.
The magnitude of the market reaction reflects widespread investor anxiety and confusion over the future direction of US trade policy.
A recession is a period of significant decline in economic activity that lasts for more than a few months. It’s typically recognized by a drop in key indicators such as gross domestic product (GDP), employment, consumer spending and business investment.
While a common rule of thumb is two consecutive quarters of negative GDP growth, economists and organizations like the National Bureau of Economic Research (NBER) look at a broader set of data to officially declare a recession.
CNBC’s flash survey of chief executives in its CEO Council revealed the scale of corporate anxiety, with 69% of respondents forecasting an imminent recession and over half predicting the downturn will begin this year.
While most anticipate the recession to be moderate or mild, their near-unanimous agreement is telling.
One CEO described the downturn as “the Trump recession,” underscoring a sentiment echoed by many executives who blame current economic uncertainty squarely on presidential policy.
The sudden escalation in trade tensions has also led JPMorgan Chase to increase its recession probability forecast for this year to 60%.
JPMorgan’s CEO, Jamie Dimon, has openly expressed concerns about declining business confidence in the current climate.
Billionaire fund manager Bill Ackman, a staunch ally of Trump, warned that the world is on the brink of “self-induced economic nuclear winter” as he begged the commander-in-chief to pause his sweeping tariffs.
The uncertainty created by tariffs has placed corporate America in an uncomfortable position, with 46% of CEOs surveyed admitting the tariffs would negatively impact their businesses.
Another 36% remain unsure, cautiously “war rooming” potential scenarios.
“We imagine that our suppliers will have to swallow part of the tariff, and we will have to pass on part of the tariff to our customers,” explained one CEO.
“We are controlling what we can control, pricing and sourcing decisions. We can’t control the impact of tariffs on the consumer mindset, which we imagine could be significant.”
Almost all executives from companies selling goods and services expect price increases of between 5% to 20%, with 82% preparing for a resurgence in inflation.
CEOs warn these price hikes could dampen consumer spending — particularly among the vital 40-to-60-year-old demographic, whose spending power has been bolstered in recent years by stock market gains.
The threat extends globally, as executives fear rising anti-American sentiment.
One CEO whose company generates nearly half of its revenue overseas told CNBC: “The biggest issue I worry about is boycotts of American brands and anti-American sentiment. There is real backlash happening.”
Another executive cautioned of “real potential for boycott of American goods,” warning it could trigger job cuts and stagflation.
Trump and his administration continue to defend their aggressive stance, asserting that reshoring manufacturing to the US will ultimately offset short-term economic pain.
But CEOs surveyed largely disagree: 45% believe reshoring will take a minimum of two years, if not longer.
The White House remains unmoved, with Trump declaring: “Sometimes you have to take medicine.”
The administration has also reiterated its goal of reducing America’s significant trade deficit with China.
Despite these assurances, most executives strongly disagree that tariffs will lead to long-term economic gains — only a quarter expressed even mild agreement with Trump’s strategy.
Ultimately, as former St. Louis Fed President James Bullard remarked, uncertainty itself may exacerbate economic downturn: “Who wants to invest when you don’t know what the rules are going to be?”
One CEO summed up corporate sentiment succinctly: “All of the uncertainty with how it’s being handled will harm our business and limit investment until this is all concluded.”
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