BlackRock moves to sidelines on developed market equities
2022.05.23 18:13
FILE PHOTO: People are seen in front of a showroom that hosts BlackRock in Davos, Switzerland Januar 22, 2020. REUTERS/Arnd Wiegmann
By Stephen Culp
NEW YORK (Reuters) – BlackRock (NYSE:BLK) Investment Institute cut its ratings of developed market (DM) equities to “neutral” from “overweight” on Monday, citing the U.S. Federal Reserve’s potentially overzealous efforts to curb inflation and signs of economic slowdown in China.
Regarding the Fed’s ramped-up rhetoric “vowing to bring inflation down at any cost,” lead analyst Jean Bolvin writes that the central bank’s conundrum “implies the sharpest policy trade-off in decades: between choking off growth via sharply higher rates or living with supply-driven inflation.”
Further, Bolvin expects China’s economic woes to be contagious, saying, “The hit to Chinese growth is starting to rival its 2020 shock and already surpasses the one from the global financial crisis.”
