- Joe Skipper/Reuters
BlackRock CEO Larry Fink thinks that the US election is hurting the economy.
There was a “huge slowdown” in the first two months of the year, according to Fink, and it was all because of fear.
BlackRock manages $4.6 trillion, and is the biggest investor in the world.
“We have an election here in this country where I think there is more fearmongering than talking about hope and a renewed future – so I think consumers will hold back,” he said in an interview with Bloomberg’s Erik Schatzker.
Fink pointed to a “pronounced weakness” in first-quarter corporate earnings and slower-than-expected economic growth.
“We have the phenomenon of new party leaders in the United States, with Donald Trump and Bernie Sanders, and I think all of this is an issue around how many people in these democracies feel like they have been left behind, and they are worried about their children’s future,” Fink said.
Fink said that political instability will force leaders across the board to focus on fiscal stimulus.
“I do believe that the candidates in the US are Trump and Clinton,” Fink said. “I think both candidates will be talking about fiscal-policy stimulus in the form of infrastructure.”
He said that if the US and UK governments were to spend on infrastructure, then it would have a positive impact on GDP in the long run.
“You are creating jobs, creating a better and more efficient grid, better and more efficient roads, ports, airports. So you can get a mileage out of it. So I believe that is what we need in this country,” Fink said.”I think that will be the narrative after the primaries.”
JPMorgan CEO Jamie Dimon emphasized the importance of infrastructure spending in his annual shareholder letter – as well as education, immigration, and tax reform.
“The problem is not that the US economy won’t be able to take care of its citizens – it is that taking away benefits, creating intergenerational warfare and scapegoating will make for very difficult and bad politics,” Dimon wrote.