Larry Fink: Expect Inflation Prior to AI and Robot Economy

Blackrock founder Larry Fink is warning President Donald Trump’s MAGA policies might cause some inflation before emerging technology allows American citizens to earn higher wages without inflation.

The mega-investor on Wall Street told a March 10 conference hosted by S&P Global:

When I go to Washington, when they talk about these [MAGA] policies, I ask “At what cost are you willing to tolerate [wage-driven inflation]? Yes, we may have opportunities to create better and more robust jobs, but then the offside of that will be, it will probably create a little more elevated inflation in the short run.

The “little more” inflation from rising wages can be reversed by productivity gains from emerging technology, Fink said. The “big deflation because of the advancement of AI and robots … is going to reshape the economy,” Fink said.

Foreign companies are already deploying the new technology that also shrinks inflation, he said:

I was with an Asian CEO that builds phones and they’re now applying AI robots — robots that have much more tensile dexterity, that they believe over the course of the next two years, their workforce will be down 30 percent with the advent of more technology and more robotics.

If you translate that across all the economies, we’re going to have shortage of [workers for] some things, like I said, in construction and electricians, and we’re going to have job [reductions] in many other industries that robots through AI are going to [cause].

China has invested heavily in robots and automation and leads the world in manufacturing output and in manufacturing technology.

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