In a private call with clients of a wealth advisory firm, BlackRock CEO Larry Fink told investors "as bad as things have been for corporate America in recent weeks, they’re likely to get worse", Bloomberg has reported.
He pointed to conversations he had with bankers who said they expect a "cascade of bankruptcies" as the possibility of a corporate tax rise, consumer hesitation and offices operating on 50% staff are all on the table over the coming months.
This concern is supported by a new survey from the Society for Human Resource Management (SHRM), which found that 52% of American small businesses expect to be out of businesses within six months, while a further 14% are uncertain and a total 74% have seen revenues fall.
Johnny C. Taylor, Jr, SHRM CEO, said: "These might be the most alarming findings to date. Small business is truly the backbone of our economy. So, when half say they are worried about being wiped out, let us remember: We are talking about roughly 14 million businesses."
Both Fink and BlackRock have been heavily involved in the US response to coronavirus, with the CEO advising Donald Trump on how to navigate the effects of the pandemic and the firm helping the Federal Reserve to buy billions of dollars in assets.
According to a person with knowledge of the remarks, Fink mused whether the Fed needed to provide greater support to the economy and warned that the corporate tax rate may rise from its current 21% to 29% to help with the nation's recovery.
He also added to the growing concerns around the airline industry, suggesting that the "American psyche" would suffer a long-lasting impact that undermines the public's willingness to fly, adding that he is unaware of any of his CEO peers planning international travel in 2020.
The worsening economic strain could also "further fan the flames of nationalism", with the impact from the pandemic possibly emerging as an even bigger threat to global order, said the CEO.