Larry Fink, Chairman & CEO of BlackRock, spoke with Erik Schatzker, Stephanie Ruhle and David Westin on Bloomberg TV’s “Bloomberg <GO>.” He discussed the Federal Reserve rate increase, the possibility of dollar-euro trading at parity, and his economic outlook for 2016.

BlackRock's Larry Fink On Yellen: "I Think She Nailed It"

Fink praised Janet Yellen after the Fed raised interest rates yesterday: “I think she nailed it. It was not too hot, not too cold, right down the center. I think it was a very well scripted conference…And the most important thing, what she gave the market is clarity. I think the opportunity they missed in September, why the markets were so unsettled because we had no clarity on their actions. And in this case they really expressed exactly what they’re looking for.”

On growth in 2016, Fink said: “I think [Yellen’s] going to be quite slow in raising rates going forward in 2016. My view is that the economy is decelerating. It is not going to be as fast as we want. We’re going to be lucky to see a 2% economy in the first part of next year.”

On a possible recession, Fink said: “I don’t see a recession unless there’s more problems in China, more problems in the world. We will not cause a recession. We may have a recession from other problems in the world. But I don’t see it emanating from the United States.”

BlackRock CEO Larry Fink: Janet Yellen ‘Nailed It’

Larry Fink: Flattening Yield Curve Good for Corporations

Larry Fink & Honeywell CEO on Fed Hike

Highlights

  • Larry Fink says Yellen ‘nailed it’ in well-scripted remarks
  • BlackRock’s fink says Yellen gave market clarity yesterday
  • Fink: U.S. Lucky to see 2% growth in 2016
  • Fink says economy is ‘decelerating’
  • Fink: Economy slowing down as farmers getting killed
  • Fink: Doesn’t see recession coming, sees rising wages
  • Fink: U.S. May have recession from non U.S. Issues, like China
  • Fink says technology is uprooting U.S. Jobs very rapidly
  • Fink: Draghi’s move on interest rates was perfect
  • Fink: Flattening yield curve good for corporate financing
  • Fink: Oil still has room to go down in price, below $35
  • Fink: Haven’t seen the bottom of energy slump
  • Fink: High yield will be very ‘squishy’ for next six months
  • Fink: Europe will surprise on upside with growth in 2016

Full transcript

ERIK SCHATZKER: I have 30 seconds’ time. I’m talking about BlackRock Chairman, Co-Founder and CEO, Larry Fink. The man who built the world’s largest money management business with almost $4.7 trillion in assets. Larry it’s great to have you here this morning.

Larry Fink: Really nice to be here.

DAVID WESTIN: Welcome.

Larry Fink: Thanks, guys.

SCHATZKER: Before we get to you, Larry, if you don’t mind, there’s some people out there hungry for the news.

SCHATZKER: The Fed made history yesterday raising interest rates for the first time in almost a decade and putting the economy on target for tighter monetary conditions in the year ahead. Investors, as we showed you, could hardly be more approving. Stocks rally, bond yield barely budged. And volatility fell to the lowest level in more than a week. A week doesn’t sound like a long time but if you’ve lived through for the past week what the market has lived through, you feel differently about it.

The biggest investor of all is with us here this morning. He’s Larry Fink of course, the Co-Founder and Chairman and CEO of BlackRock who’s $4.7 trillion makes it the world’s largest money manager by far. Larry good morning once again.

Larry Fink: Hello, Erik.

SCHATZKER: I suppose we should begin by talking about Janet Yellen. What she said yesterday. What the Fed said yesterday. Did she kill it or what?

Larry Fink: I think she nailed it. I think it was just, it was like, it was not too hot, not too cold, right down the center.

STEPHANIE RUHLE: Just right.

Larry Fink: Just right. I think it was a very well scripted conference. When she was in the Q&A, she had, I think she nailed every answer very well. You know, I think some people can interpret that she was a little hawkish; some people interpret a little dovish. I think it was right where she should be.

And the most important thing, what she gave the market is clarity. I think the opportunity they missed in September, why the markets were so unsettled because we had no clarity on their actions. And in this case they really expressed exactly what they’re looking for. How they’re looking at it. Their forecast going forward. And once again, she’s going to say we’re data dependent on the course going forward. But I think she gave such great clarity that I think the marketplace can be calm. And I think the marketplace can understand looking at numbers, how the Fed will operate.

My interpretation of what she said is probably a little different than others. I think she’s going to be quite slow in raising rates going forward in 2016.

WESTIN: Why?

Larry Fink: Well, our view is, or my view is that the economy is decelerating. It is not going to be as fast as we want. We’re going to be lucky to see a 2% economy in the first part of next year. And the main purpose is we’re seeing the two major components of the economy, that got the economy out of its problem in 2009, are now being hurt. And that’s energy and that’s farming.

Our farmers are getting killed and we don’t spend enough time talking about it. Because our farmers are selling their products in dollars and in Brazil with the big real collapse that’s the one sector of Brazil that’s really benefitting.

So two major sectors are being harmed. Now most people would say the consumer is benefitting and they are worldwide, having oil at these prices. On the other hand it is my view the consumer is becoming a little more aware of the perils they have towards retirement.

SCHATZKER: But you still see a path towards higher rates? Because Sam Zell, for example, said growth may be slightly below 2%. Sam Zell was sitting here yesterday said he’s looking at a recession in 12 months. David Rubenstein not long ago said he’s looking at a recession in 18 months.

Larry Fink: I don’t see a cause to call for a recession yet. And I think the consumer is certainly benefiting from this. We are going to see rising wages. And we’re starting to see beginning rising wages there. And I think this is one of the reasons that the Federal Reserve started the beginning their process of tightening.

We have 3.4% unemployment of men and women who have a college degree. So we’re going to see the beginning of wage inflation. So I don’t see a recession unless there’s more problems in China, more problems in the world. We will not cause a recession. We may have a recession from other problems in the world. But I don’t see it emanating from the United States.

WESTIN: A Bloomberg News piece said overnight that

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