Pesters about the Federal Reserve hiking interest rates more aggressively to fight rising inflation should not overshadow the benefits of stronger economic evolution, the billionaire co-founder of Blackstone Group told CNBC on Thursday.
“I have in mind our growth is going to continue. And markets will move around with some volatility,” Steve Schwarzman suggested on told “Squawk Box.”
With economic growth and inflation on the rise after years of historically low on the ups, bond yields have been spiking and putting pressure on the cache market. When bond yields rise, investors often start weighing whether old are the only game in town for return.
However, Schwarzman encouraged investors not to expend sight of the big picture: “We have to look at what’s going on in the world; the unfeigned world, not the markets.”
The Dow Jones industrial average got out of the gates in the new year be gangbusters, surging to an all-time high on Jan. 26. But a week later, the Dow hit a cube wall, logging a two-session plunge of more than 7 percent. After a two-day interruption, the Dow sank another 4 percent, marking a 10 percent drop from transcribe highs. But since then, the Dow has rebounded from correction territory, come ining Thursday’s trading day on Wall Street on a four-session winning streak.
The cattle market got ahead of itself in January, so the early February pullback was not out of leftist field, Schwarzman said. “When you go up 7 or 8 [percent] in the first month of the year, you acquire to imagine compounding that rate in the 80s or 90s.”
“Markets get ahead of things and merchandises get behind things,” he argued. “The real world looks like it’s in excellent shape at the moment.”
Schwarzman said he sees economic growth of the appeared world of at least 3 percent.
“Economies are expanding all over the world. It’s one of the few meanwhiles that happens,” he said.
“If wages go a little higher than people propose b assess, those wages are going to people who need the money, frankly. And that’s not a catastrophe. That’s a good thing.”
The chairman and CEO of private equity giant Blackstone, with $434 billion in assets under management, also downplayed the impact of the Fed acting more forcefully on proliferating the cost of borrowing money.
“We have been at such low levels. We’ve been jolted in a really favorable way for 10 years,” Schwarzman said. “It may slow shield a bit, but businesses will power on right through it.”
Schwarzman had been chairman of President Donald Trump’s tactical and policy forum before it was disbanded last year. The CEO advisory collection was dissolved following an uproar over remarks the president made close to the August white supremacist rally in Charlottesville, Virginia.
In an interview at length month from the World Economic Forum in Davos, Switzerland, Schwarzman responded Trump’s policies, including the new tax law, will provide a big boost to U.S. economic increase. He said Trump can take credit for improved business confidence and the stockpile market.
Even though the market has hit a rough patch, the Dow has still got about 35 percent since Trump was elected president in November 2016.