The stock market would have some “setbacks” if President Donald Trump and the Republicans on Capitol Hill are unable to deliver on the promises of broad tax reform and “true deregulation,” BlackRock Chairman and CEO Larry Fink told CNBC on Thursday.
“If you believe it will be longer for these [policies] to transpire — and we have an economy that’s slowing because of uncertainty — then I would say the U.S. equity markets are probably higher than they should be,” Fink said on “Squawk Box.”
The U.S. will likely have the slowest first-quarter economic growth of all the G-7 nations, Fink said, predicting a gross domestic product print of under 1.5 percent.
Stocks would come under pressure if economic growth slows, he said.
European stocks are a better value right now than U.S. stocks, Fink said.
Fink sees only one or two more interest rate hikes this year instead “three or four.”
Wall Street on Thursday was coming off its biggest intraday reversal in 14 months, with the Dow Jones industrial average giving back a nearly 200-point gain to end the day lower.
The minutes from the Federal Reserve’s meeting in March — when policymakers last hiked interest rates — sparked the afternoon stock sell-off. Markets were rattled by the Fed’s comments about reducing the central bank’s $4.5 trillion balance sheet more quickly than investors had anticipated, as well as remarks about high equity valuations.