BlackRock CEO Larry Fink said Thursday he is optimistic about financial markets as the economy tries to recover from the coronavirus pandemic.
“I’m incredibly bullish in the markets,” Fink said in an interview with CNBC’s “Squawk Box,” while adding that he shares long-term concerns about the implications of government deficits.
“Is that a concern for me right now? No,” he added.
A number of factors are likely to drive markets higher in the short term, Fink said, although the S&P 500 and Dow Jones Industrial Average are already at record levels.
“I think because of the monetary stimulus, the fiscal stimulus, the cash on the margin, the gains, the markets are fine. The markets will continue to be stronger,” said the co-founder and chairman of the asset manager more great of the world.
There are short-term risks to the market, he warned. He said the arrival of coronavirus variants that drastically reduce the effectiveness of Covid vaccines is currently the largest.
By contrast, Fink said the public deficit – which has grown as the U.S. Congress approved the $ 1 trillion pandemic stimulus to support the economy – poses a longer-term threat. time limit.
“Deficits right now aren’t a big deal, and that’s what the markets say,” Fink argued. “They’re not a big deal because the amount of money that’s on the margin, the amount of capital that’s being put into operation.”
However, Fink said the strength of the economy in the coming years could change his outlook.
“If we don’t have economic growth that is sustainable over the next 10 years, and I say economic growth is above 3%, our deficits will be significant and interest rates will rise at some point,” he said.
Fink’s comments came Thursday after BlackRock reported first-quarter results that exceeded Wall Street expectations. The company’s managed assets also rose to just over $ 9 trillion, up 39% from $ 6.47 trillion in the same quarter last year.