Blackstone Group, the world’s largest alternative asset manager, is warning of a continuing slowdown in economic activity as persistently high inflation forces the Federal Reserve to continue raising interest rates.

“The economy today on the ground is still pretty healthy, but we’re definitely seeing some signs of a slowdown,” Blackstone’s president Jonathan Gray told the Financial Times. “Because we see inflation as stickier, in labour and housing markets, in particular, I think it will mean the Fed will try to do more and slow the economy further.”

An increasingly aggressive central bank also has Blackstone expecting a prolonged lull in dealmaking activity from the record levels set last year, with Gray warning they had “seen a material reduction in deal activity”.