Stephen Schwarzman, the CEO of Blackstone, expressed concerns about the U.S. economy under a potential second term for President Joe Biden, citing significant deficits, rising debt-to-GDP ratio, and open borders.
Despite this, he remains optimistic for 2024, expecting interest rates to decrease and pointing to Blackstone’s measurement of U.S. inflation at around 2%, aligning with the Fed’s target, in contrast to the Bureau of Labor Statistics’ data.
Schwarzman emphasized Blackstone’s expertise in real estate, suggesting that their measurements provide a more accurate picture of inflation.
“We’ve now got $2 trillion deficits with no end in sight. We’ve got our debt-to-GDP [ratio] going up. We’ve got open borders with 8 million people coming over,” Schwarzman said.
“I don’t know that the country, frankly, is prepared for four more years of that.”
“It would be good if we could get our financial house in order,” Schwarzman said, adding that the U.S. is not headed for a “big financial problem.”
“Usually financial crises come when you don’t expect them and they come quickly,” he said.
“We will get the [rate] cuts,” he said with confidence.
“They’re looking at 6% in rents and residential real estate [inflation] and we’re the largest owner of residential real estate and we think it’s 0-1%,” Schwarzman said.
“Let’s bet on us [Blackstone] on this one because we’re the people actually doing it. And if you correct the index for that difference between what’s really going on [in residential real estate] and [what] they’re saying is 6.2%, you get around 2%.”
