Widespread uncertainty about a broad swath of policies from President Donald Trump's administration has created an uncertain backdrop for the U.S. economy, according to BlackRock Inc. Chairman and CEO Laurence Fink and Carlyle Group LP Co-CEO David Rubenstein.
Addressing an audience at the Deutsche Bank Global Financial Services Conference in New York, Fink blamed the opacity surrounding the administration's tax and infrastructure policies for creating "forward drags" on the U.S. economy, while potentially limiting new investments from companies. By contrast, Fink expressed a more sanguine view of the investment outlook in Europe due primarily to enhanced political stability in France and Germany, in combination with a banking system he described as on "solid footing" after years of turmoil.
"If you contrast the U.S. with all the uncertainty we have going into this year and throughout this year, with a greater certainty to where Europe is today, I would say it leads to better outcomes with business leaders investing," Fink said.
Hours earlier at the same conference, Rubenstein noted that while Trump's proposal for a border adjustment tax has garnered support in the U.S. House of Representatives, the measure seems to have received less backing in the Senate.
"There's no really good mechanism everybody has agreed upon," Rubenstein said.
For the remainder of 2017, Rubenstein indicated that a number of projections for U.S. economic growth could hinge on developments related to potential deregulatory activity along with federal tax cuts. If there are signs that neither will occur, Rubenstein added, it could prompt some economists to lower their outlook.