BlackRock CEO Larry Fink said on Thursday that he is optimistic about the financial markets, while the economy is trying to recover from the coronavirus pandemic.
“I’m incredibly market-going,” Fink said in an interview with CNBC’s “Squawk Box,” adding that he shares long-term concerns about the implications of government deficits.
“Is it a concern for me right now? No,” he added.
A number of factors will propel growing markets in the short term, Fink said, even though the S&P 500 and Dow Jones Industrial Media are already close to record levels.
“I think because of the monetary stimulus, the fiscal stimulus, the cash on the sidelines, the gains, the markets in order. The markets will continue to be stronger,” said the co-founder and president of the world’s largest asset manager.
He warned that there are short-term risks to the market. He said the arrival of coronavirus variants that dramatically reduce the effectiveness of Covid vaccines is currently the largest.
Instead, Fink said the government deficit – which has grown as the US Congress has passed billions of dollars worth of pandemic stimulus to support the economy – poses a longer-term threat.
“The deficit right now is not a major issue, and that’s what the markets say,” Fink said. “They are not an important issue because the amount of money that is on the sidelines, the amount of capital that is trying to put to work.”
However, Fink said the strength of the economy in the coming years could change his outlook.
“If we don’t have sustainable economic growth over the next 10 years – and I say economic growth that exceeds 3% – our deficits will count and interest rates will rise at some point,” he said.
Fink’s comments came on Thursday after BlackRock reported first-quarter results that exceeded Wall Street expectations. The company’s assets under management also rose to just over $ 9 trillion, up 39 percent from $ 6.47 trillion in the same quarter a year ago.