Key Points

  • BlackRock CEO Larry Fink said Monday that most CEOs he has spoken with believe the U.S. economy has already been pushed into a recession by a pullback in consumer spending.
  • "Most CEOs I've talked to say we're probably in a recession right now," Fink said in response to a question at an Economic Club of New York event. He cited one airline CEO as saying the aviation industry is like a canary in the coal mine, "and that canary is sick."
  • Fink noted that even before the Trump administration's tariff policies hit the stock market, "you could already see increasing hesitation from consumers, more people slowing their purchasing pace and postponing vacation plans." He said, "You can imagine that with the (stock market) setback, all of this will freeze more consumption, and we will see that effect very quickly."

In-Depth Analysis

Fink was just one of several Wall Street heavyweights warning about tariff policies on Monday. The U.S. recently imposed tariffs on nearly all trading partners, including a 10% baseline tariff on all imports and reciprocal tariffs of up to 34% on China.

Pershing Square Asset Management CEO Bill Ackman said on X on Monday, "We are destroying the world's confidence in our country as a trading partner, a place to do business, and a market for capital investment."

JPMorgan Chase CEO Jamie Dimon predicted that this round of tariff shocks will push up inflation and slow growth, consistent with Federal Reserve Chair Jerome Powell's remarks on Friday. Speaking of the risks of retaliatory tariffs and a prolonged trade war, Dimon said, "What I worry most about is how this will affect America's long-term economic alliances."

JPMorgan raised its probability of a U.S. recession to 60% from 40% on Friday, after several institutions had already said an economic slowdown was more likely than a month ago. Dimon said "significant and somewhat unprecedented forces"—including tariffs and stock prices that remain high after the recent sell-off—"keep us highly cautious." He noted that tariffs carry the risk of retaliation and could also hurt corporate profits, capital flows, and the dollar's valuation.

"The sooner this is resolved, the better, because some negative effects accumulate over time and are hard to reverse," Dimon wrote. "In the short term, I think this is another big straw on the camel's back."

UBS non-executive director and former New York Fed President Bill Dudley said Monday that this round of import tariff shocks brings inflation and recession risks. In a commentary piece for Bloomberg, Dudley wrote, "The president's attack on free trade is unprecedented in scope, scale, and disregard for nuance." He estimated that the trade-weighted average tariff rate would surge this year from below 3% to at least 25%. Dudley predicted that while consumers will cut spending in response to the shock equivalent to a $600 billion tax increase, inflation will still rise to nearly 5%. "The impact will be devastating," he said. "All in all, stagflation is the optimistic scenario. The more likely outcome is that the U.S. falls into a full-blown recession with higher inflation."

The Atlanta Fed's forecast on April 3—the day President Trump announced sweeping import tariffs—showed first-quarter gross domestic product growth could contract at an annualized rate of 2.8%.

"The economy is weakening, right now as we speak," Fink said. He called on the Trump administration to deliver on its promises of deregulation and extending the 2017 tax cuts. "We will see more evidence of the slowdown in the coming months," he said. "Investors will have to keep pricing in slower growth, less consumption, and other factors."

Oaktree Capital co-chairman Howard Marks criticized the dismantling of the post-World War II trade order in an interview with Bloomberg Television on Friday. "We have gone from free trade, world trade, and globalization to a system that means comprehensive and severe restrictions on trade, and a step toward U.S. isolation," he said.

Stanley Druckenmiller, former chairman and president of Duquesne Capital, was more succinct. He said on X, "I don't support tariffs above 10%."