Carlyle CEO Says Sticky Inflation Reflects A Strong Economy, Defends Powell’s Cautious Stance On Rates

Carlyle Group CEO Harvey Schwartz struck a contrasting note from prominent Wall Street CEOs, such as Jamie Dimon and Larry Fink, stating that sticky inflation is a sign of a resilient economy.

In an interview with Bloomberg, Schwartz underscored that it is too early to predict a recession, given that economic activity remains strong.

“We see the stickiness of inflation. That’s actually a reflection of a strong economy, low unemployment,” he said.

However, Schwartz defended Fed Chair Jerome Powell’s wait-and-watch approach as far as key policy rates are concerned.

In a speech at the Economic Club of Chicago, Powell said Trump’s tariff policies could increase inflation. 

He added that survey- and market-based measures of near-term inflation expectations had risen “significantly.”

Schwartz thinks Powell is doing the “wise thing right now” amid an uncertain economic environment.

“What they don’t want to do is cut rates unnecessarily and then be behind the curve, and have to come back up,” he added.

Regarding the U.S.-China trade tensions, Schwartz emphasized that the two countries need to find an equilibrium.

The Carlyle Group CEO’s comments come at a time when JPMorgan CEO Dimon and BlackRock’s Fink have cautioned that Trump’s tariffs could result in a growth slowdown.

While Dimon thinks that there could be S&P 500 earnings cuts, he expects analysts to estimate that earnings will remain flat initially, and eventually, a 5% contraction by “probably the next month.”

Amid the ongoing tariff-induced economic concerns, the SPDR S&P 500 ETF Trust (SPY), which tracks the S&P 500 index, edged lower by 0.30% on Thursday.

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