BlackRock CEO warns that the market underestimates the inflationary pressure brought by Trump, and the Fed may be unable to cut interest rates.

The U.S. February CPI data came in lower than expected, leading to general market optimism. However, BlackRock CEO Larry Fink warned that inflation will pick up in the next 6-9 months due to U.S. nationalist policies causing labor shortages, impacting agriculture and AI data centers, in addition to potential import cost increases from Trump's tariff policies. The U.S. Labor Department's lower than expected consumer price index (CPI) data provided some relief to investors, avoiding direct concerns about stagnation and increasing market expectations for a Fed rate cut in the coming months. BlackRock CEO: Inflation Will Pick Up in the Next 6-9 Months However, BlackRock CEO Larry Fink indicated at the CERAWeek conference in Houston that U.S. nationalist policies, including worker repatriation, will intensify inflation. He pointed out that the market underestimates inflation and expects costs to further rise in the next six to nine months. Fink believes that these policies may lead to labor shortages, particularly in key areas such as agriculture and AI data centers, driving up operating costs for agricultural products and AI infrastructure and causing inflation to rise. He stated: Will we have enough workers to harvest these crops? I even told members of the Trump team that we will face shortages of electricians, essential for building AI data centers. We just don't have enough manpower. He added that Trump's high tariff policy may significantly raise import costs, further exacerbating inflationary pressures. Experts: Fed Faces Pressure to Hold Rates Moreover, other economists are cautious about this data. TS Lombard's chief economist Steven Blitz believes that this does not indicate a confirmed trend, as there are still some abnormal fluctuations in the data that make it difficult to determine whether inflation is truly declining. He pointed out that despite the drop from 3.5% to 2.7% in the prices of goods excluding food and energy from January, it is still not stable enough. He believes that the price changes of these goods are closely related to tariff policies, especially the most obvious initial impact. Additionally, he also cautioned that with a strong job market, rising wages may drive up purchasing power, leading to a rebound in inflation, so this data drop should not be taken optimistically. BTC Big Villain, SchiffGold Founder Peter Schiff also expressed on X platform that investors should not be excited by the 0.2% rise in Feb. CPI just because it's less than the 0.3% that was expected. Inflation is still much too high, and headed higher. The lower Feb. number was mainly due to a temporary drop in oil prices, which will soon head much higher too! Price Rise, Volume Contraction, Market Faces Risk of Further Decline According to Santiment's analysis, overall cryptocurrency volume has continued to decline since it peaked on February 27th, with traders showing signs of exhaustion, despair, and even capitulation after further market cap declines. Santiment pointed out that when mainstream cryptocurrency volume continues to decline even with a slight price rebound, it usually indicates weakening market participation. This situation shows that traders are becoming cautious and may not believe that the current price uptrend can be sustained. In other words, reduced trading activity reflects market uncertainty, and many investors are skeptical about whether the current price levels will bring substantial returns. Furthermore, weak volume during price rebounds may signal early weakening market momentum. Without sufficient buyer support, upward momentum often cannot be sustained, increasing the risk of a market decline. Although reduced volume does not directly indicate an imminent bear market, volume is an important indicator of retail and institutional investor participation. If both parties are waiting for the other to push market cap higher, the market may stagnate or even slightly lean towards a downturn. Santiment believes that to confirm a healthier and sustainable market uptrend, price and volume should rise simultaneously. Until trading activity significantly picks up, cautious sentiment may still dominate the market.