BlackRock's Fink sees potential risks and says the bond market will tell us where we are going

Core Viewpoint - BlackRock CEO Larry Fink expressed concerns that President Trump's initiatives to stimulate private sector capital could inadvertently harm the stock market due to potential inflationary pressures [1][2]. Group 1: Economic Outlook - Fink is cautiously optimistic about the potential for significant growth if private capital is effectively utilized, but warns of inflation risks that may not be fully considered by the markets [2]. - The success of capital deployment in the private sector is crucial, with notable investments such as the Stargate joint venture, which involves a $100 billion immediate investment for AI infrastructure, potentially leading to a total of$500 billion [2]. Group 2: Inflation and Interest Rates - Fink highlighted the presence of substantial inflationary pressures that could lead to elevated interest rates, negatively impacting the equity market [3]. - There is a possibility that the 10-year Treasury yield could approach 5% or even 5.5% if inflation accelerates, which would significantly shock the equity market [3]. - The current benchmark 10-year note yield is at 4.62% [4].