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By Tatiana Bautzer and Ross Kerber
(Reuters) - BlackRock CEO Larry Fink said stock markets could fall 20% farther as steep U.S. tariffs lead some investors to believe the U.S. economy may already be contracting.
"Most CEOs I talk to would say we are probably in a recession right now," Fink told the Economic Club of New York on Monday. The tariffs will lead to higher prices, adding to inflationary pressure.
Still, the leader of the world's largest asset manager said stock market weakness since the tariff announcement on Wednesday 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," he said.
Fink was among the first Wall Street executives to weigh in publicly on the market meltdown after U.S. President Donald Trump announced steep new tariffs last week. On Monday, Trump threatened another 50% tariff on Chinese imports, pushing the S&P 500 toward a 20% drop from its February high.
Fink said stock market declines are hurting average people and will affect their spending.
"The reality is 62% of Americans now invest in equities -- the market impact is impacting Main Street," he said. The turmoil "is going to freeze more and more consumption, I think we're going to start seeing that really quickly."
The Trump administration could offset slowing consumption by focusing on deregulation and pro-growth policies, Fink said, citing the potential for mergers among large banks.
Fink said he sees no chance the Federal Reserve will cut interest rates four or five times this year given the inflation outlook.
He expressed concern the U.S. could lose its place as the leading capital market.
Regulatory review of BlackRock's deal with Hong Kong-based CK Hutchison for control of important ports near the Panama Canal could take nine more months, Fink said.
Saying the deal was driven by commercial interest rather than geopolitical considerations, Fink added he discussed the transaction with U.S. policymakers and was optimistic it would be approved.
Asked about succession at BlackRock, Fink said he is ready to step down and retain his chairman role for short period when the next generation of leaders is ready.
"They think they are not ready yet," he said.
(Reporting by Ross Kerber and Tatiana Bautzer, editing by Lananh Nguyen and Cynthia Osterman)
