Blackstone CFO Chae Wants Soft Landing As Inflation Cools Faster Than Expected Via Investing.com

Investing.com — Blackstone (NYSE: ) Chief Financial Officer Michael Chae said Wednesday he is “cautiously optimistic” about a soft landing as inflation is likely to cool faster than expected.

“We don’t have a crystal ball about where this is going, but we are cautiously optimistic about a soft landing,” Chae said in remarks at the Barclays conference call on Wednesday.

A recession forecast is not one shared by many CEOs running Blackstone’s portfolio companies, with about 14 percent predicting a recession in the next 12 months, Chae said, citing a June Blackstone survey.

“What we’ve seen is both inflation and the economy cooling,” Chae added, pointing to Wednesday’s data showing August’s CPI rose 2.5 percent.

Blackstone’s chief financial officer believes, however, that inflation is slowing faster than expected. The August CPI data did not take into account the most recent slowdown in housing inflation, as shelter is a lagged component of the CPI.

Excluding housing, the year-over-year CPI in August is around 1.7% versus 2.5%, Chae estimated, pointing to gaps in the housing component, which “lagged behind in growth” as inflation rose and “left behind. down.”

As the debate rages over whether the Fed will cut by 25 basis points or 50 basis points, Blackstone’s chief financial officer said instead that the destination of the 10-year Treasury rate is even more important to investors.

“At the current kind of mid-3, zone 3 to mid, that’s a pretty constructive context for the capital markets and for our business,” he added.