Let’s start with the big picture. BlackRock says the economic uncertainty that peaked earlier this year has calmed down a bit. Why? Mostly because the markets have finally gotten a clearer read on what President Trump’s economic playbook looks like: new tariffs, big tax cuts, and a looser stance on debt spending. While these policies may swell the national debt in the long run, BlackRock argues that the short-term panic was overblown. Tariffs, for example, likely won’t be as harsh as initially feared, since excessive trade barriers could hurt U.S. businesses as much as foreign ones.

Still, we’re not in stable territory. The old market “anchors”—predictable debt levels, modest inflation, and steady growth—have been shaky since the pandemic. And in the first half of 2025 alone, the stock market crashed three separate times. But here’s the twist: we’re already back near all-time highs. Volatility may be the new normal, but opportunity is still there for those who stay sharp.

There’s also a lot of chatter about “dollarization”—the idea that BRICS countries (like Brazil, Russia, India, China, and South Africa) are trying to ditch the U.S. dollar in favor of new trade currencies. BlackRock acknowledges the trend but calls it more bark than bite for now. The dollar, they say, remains the world’s reserve currency and likely will for decades to come.

So how should you invest in this environment?

1. U.S. Stocks Still Win
Despite the noise, U.S. stocks have outpaced inflation and remain a core part of BlackRock’s portfolio. In fact, with asset prices rising over 95% since 2020, equities have far outstripped wage growth (up only 20%) and even inflation (up 24%). Companies are earning more and passing profits to shareholders, not workers. If you’re invested, that’s good news.

2. Skip U.S. Bonds—Go European
BlackRock prefers European bonds over U.S. treasuries. The logic? America’s persistent deficits, inflation risk, and rising reliance on money printing make U.S. debt a less attractive long-term investment. European markets, in contrast, offer more income stability and fiscal discipline.

3. Bet on AI—but Look Beyond Tech
Everyone’s talking about AI, but BlackRock sees value in some unexpected corners. Specifically, they’re bullish on utilities—an industry often overlooked in tech conversations. Utilities have been name-dropped more often in AI-themed earnings calls than even the S&P 500 average, which signals growing infrastructure investment to support AI expansion.

4. Choose Physical Gold Over Treasuries
In a clear signal of concern about U.S. debt, BlackRock favors physical gold over government bonds. It’s a hedge against inflation and political risk, offering upside potential without the risk of lending to a country spending more than it earns.

Bottom line? BlackRock is walking a fine line: embracing the upside of inflation and AI while hedging against long-term structural risks in the U.S. economy. Their strategy focuses on equities for growth, gold for protection, and European bonds for stability. It’s not about avoiding risk—it’s about choosing the right kind of risk in a shifting global economy.

Jaspreet Singh is not a licensed financial advisor. He is a licensed attorney, but he is not providing you with legal advice in this article. This article, the topics discussed, and ideas presented are Jaspreet’s opinions and presented for entertainment purposes only. The information presented should not be construed as financial or legal advice. Always do your own due diligence.

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