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BlackRock's Fink: US shutdown damage already done
by Harry Brooks on Oct 18, 2013 at 10:42
US stock market earnings are set to plummet in the fourth quarter as a result of the debt ceiling crisis in Washington, BlackRock chairman and CEO Larry Fink has warned.
Government officials finally began returning to work yesterday following an 11th-hour deal, but Fink told Bloomberg Television that the damage has already been done.
'Whatever influence, if any, I have in Washington, I will try to make sure they understand this is extremely damaging to the economy. I think the fourth-quarter results will come in negative. This is as a result of the behavior of Washington,' he said. 'We are going to see a very, very weak fourth quarter.'
As a result of this slow growth the Fed will delay its tapering of stimulus 'by three to six to nine months, maybe longer,' Fink added.
On the impact of the standoff on the country's bond market, Fink said the protracted wrangling has undermined investors' faith in the US. 'I think we are going to see more trepidation from foreign investors in our bond market,' he said.
'Many of our foreign investors have had conversations with me and many at BlackRock about how should they think about investing in U.S. debt over the next few years. We are trying to calm them and give them a little more support. Frankly, we need to see movement in the next three months.'
Watch the interview with Larry Fink below (credit: Bloomberg Television)
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