Larry Fink is worried about two impending crises in the US.
During an interview at Yahoo Finance’s All Markets summit, Fink identified two long-term problems that are looming over the US economy.
One, according to Fink, is the deficiency of infrastructure — roads, bridges, and more — in the US.
“It’s now getting late for preparing cities for new technologies,” said Fink during an interview with Yahoo Finance editor-in-chief Andy Serwer.
Fink noted that much of the infrastructure spending is currently going towards repairing existing roads and bridges, and not towards the large-scale investments needed for the US to compete in the future.
The infrastructure issue was one of the main concerns Fink brought up during the meeting between business leaders and President Donald Trump on Friday, he said. Fink also reiterated his commitment to working with Trump to help on infrastructure despite, as Serwer noted, being a Democrat.
The second, said Fink, is the pending retirement crisis facing Americans.
The BlackRock CEO said that American investors have “too much in cash” and low interest rates are not allowing savers to generate enough capital to retire.
Additionally, the public pensions that once helped people retire are facing their own issues since the state and local governments that once funded them are facing funding short falls while also having to deal with deficient infrastructure.
Fink has mentioned the retirement crisis before in his annual letter to the CEOs of every S&P 500 company in January.
“If we are going to solve the retirement crisis — and help workers adjust to a globalized world — businesses need to hold themselves to a high standard and act with the conviction that retirement security is a matter of shared economic security,” said Fink in the letter.
During the discussion, Fink also noted that he sees “dark shadows” in the market as governments pull back from global trade and that the looming threat to jobs from automation could lead to instability in the future.
All of this has led to a “bi-polar world” in which stocks could face “setbacks” and the US Treasury 10-year yield could drop under 2% or jump over 4%, depending on the policies from President Donald Trump, Fink said.
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