BlackRock CEO wary on rise in dollar, expects US rate hike from September

BLACKROCK chief executive Larry Fink on Tuesday said he expects the Federal Reserve to hike interest rates from September. But this will come amid the rapid rise in the US dollar, which will impact growth in the US economy.

"It is our expectation that they are going to begin in September. They're certainly not going to do it in June," Mr Fink told participants at a Credit Suisse conference in Singapore.

"If you use inflation as a measurement, they're not behind the curve," added Mr Fink, noting the same for GDP. "If you use full employment, they may be behind the curve."

But given the expectations of a weak first-quarter for GDP growth, the Fed is likely to take another three to four months "to look at data and see where they're going", said Mr Fink.

This also comes as the speed of the rising dollar will impact economic growth at a time when the Internet offers price transparency for global shoppers, he added. This has allowed small American merchants to sell their merchandise overseas through Internet platforms over the last few years.

"In the last six months, with the change in the valuation of the dollar, we're seeing non-US enterprises selling their merchandise to the US. A big swing," said Mr Fink.

"A good example is my wife, who buys a lot of make-up, does it mostly on the Internet. And she doesn't pay attention to where it's being sourced.

"So she bought from a very important brand of make-up, and it was shipped from a small merchant in Singapore."