Even if the US is in a recession, it's likely to be mild and there's no need to panic over 'fixable' inflation, BlackRock's Larry Fink says

"More of our clients are interested in voting on their index holdings," BlackRock CEO Larry Fink, pictured here in March, told analysts last year.

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• The US economy may be already in recession, but even so, it will be mild, BlackRock boss Larry Fink said.
• Inflation is fixable over time, and there's no need for long-term investors to panic, he said in an interview Wednesday.
• BlackRock is the world's largest asset manager, with $10 trillion in assets.

The US may well already be in a recession — but even if that is the case, it should be quite mild, and long-term investors have no need to panic over "fixable" inflation, according to BlackRock's Larry Fink.

Fink, the CEO of the world's biggest asset manager, said it's "definitely business as usual" for long-term investors, even after inflation topped 9% to hit 41-year highs and several economic indicators suggested activity is slowing. 

"Let's be clear. We do have really elevated inflation. A lot of it is policy generated," Fink told CNBC's Jim Cramer on "Mad Money" Wednesday.

Broad-based inflation has swept the US economy as prices of a range of good from gasoline to used cars and food have soared. But Fink believes it's the product of supply problems, rather than demand. 

"Demand is actually unchanged from 2019, so that's what people don't understand. Demand has not changed that much," he said.

Global supply-chain bottlenecks that followed a fierce bounce-back in economic activity from mid-2020 onwards squeezed the availability of key raw materials and components such as semi-conductors. This effect has been magnified by Russia's war in Ukraine, which has disrupted trade flows and fueled commodity price rises even further.

Central banks, including the US Federal Reserve, are racing to raise interest rates to stem inflation, but many face a delicate balancing act to avoid hitting economic growth too hard. Investors are dumping any remotely risky asset, and that has pushed the stock market into bear territory on raised fears of recession.

But Fink, whose company manages $10 trillion in assets on behalf of clients ranging from huge pension funds to high-net worth individuals, said this concern was unfounded.

"The Federal Reserve's tool is to tighten, and through tightening they limit demand. So is there a risk of a recession? Sure there is. And even if we're in one, it's going to be quite mild," he said. 

"A really famous person calls me up, panicking, 'What should I do? I've got to get out, I can't stand it, I can't stand it.' And I said, 'go on vacation,'" he told Cramer.

"If you can't sleep at night, sell. But the reality is we've seen this inflation is going to be fixed over time. We're already seeing commodity prices crashing from the highs," he said.

Crude oil prices have surged to multiyear highs above $100 a barrel this year. That pushed average US gasoline prices at the pump above $5 a gallon for the first time, though they are now falling back.

Yet commodities such as copper and lumber, which soared over 2021, have dropped by 21% and 41%, respectively since the start of the year, as worries over economic slowdown have mounted.

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