BlackRock CEO Larry Fink: We're too focused on monetary policy and not enough on fiscal discipline

You know what, we've got a great treat because we've got someone who kind of understands and spans all the data, like everything. And that's why we like to speak to Larry to make it BlackRock and their shares are ticking up as opposed to every other bank when they, because it's not a bank, that's what's important. I'm going to go right to you, Larry. Happy New Year, guys. Absolutely, that too. By the way, Larry David says you can't do that past January 5th. How did you do it? How did you take in some, you're talking about a step function that you took in this time since we've seen you last. How did you do it? I'm not sure it was a step function. Over the last five years, we raised two and a half trillion dollars. So it's not much of a step, but we had our best year ever, 700 billion in net flows, 342 billion in the last quarter. I think it's, I think what you're seeing in every industry, in every economy, we're starting to see more and more K economies. I think the scale operator is winning more share of wallet in our case. The growth that we saw in Latin America, in Asia, in the Middle East was extensive. No firm has a combination of public markets, now private markets, investment technology. So we're able to provide a whole portfolio, a complete relationship. When you think about, you know, everyone's speculating what's going to happen in 401ks and the introduction of private markets. Well, we're the largest player in that already. And so we have those type of relationships already. It is not just about inserting private markets. It's about a portfolio. It's about, you know, trying to create the most unique portfolio to meet the beneficiaries' long-term needs. And we've organized the firm to provide both public and private markets. And then you intersect what we're doing in investment technology, which we had 16% ACV growth in the quarter. If you're going to provide private markets into 401ks and all that, you're going to need to justify it. And the only way we're going to be able to justify it is through investment technology. They're coming to BlackRock to set that up as we develop PreQuint as a part of Aladdin. So the words you used in the call, differentiated momentum, is that what I'm hearing you talk about? Is that the differentiation? I don't think I said that, but I like that term. Oh, all right. Well, somebody said we entered 2026 with differentiated momentum. We have. Yeah. But look, there was a negative thesis going around, which was that this is commoditized. I think that this was the quarter where it just says, no, there's BlackRock, and then there are the companies that are commoditized. What we saw over the last 10 years, 15 years, as we've done mergers, every time you do mergers, there's questions on, are you integrating? Can you achieve what you expected? So there's always that uncertainty post-mergers. We saw that certainly in 2009 when we did BGI, when everyone said you could not marry public markets, passive and active. I guess they were wrong on that when iShares had $300 billion and now $5.5 trillion. And now we're merging both public markets and private markets, and there was that uncertainty. I think what the fourth quarter showed, maybe that uncertainty was not unjustified. We are executing. The integration of all three firms is going as planned, if not far beyond plan. Is this year going to be the year of the steeper curve? I think so. There's good justification of lowering rates if you believe the power of AI. If you see the deflationary impact of China with a trillion dollar trade surplus, these are all very deflationary trends. And the AI is deflationary. And so it may not show up as much in 2026, but out 2027, you could see real impact on that. And so I do believe that's going to lead to a steeper yield curve. And that is why we think income is going to be a big theme over the next few years. Let's talk about something that you've come on many times and lamented. There really wasn't a new generation of savers. You were concerned. I see the possibility here of a new generation. And by the way, the Trump accounts make it fantastic. Jim, over the last 10 years, we did more to democratize investing. We lowered our fees by over $600 billion. So here we are, the scale operator with rising margins and lowering fees. And so what we have done is purposeful, but it is also meaningful. I mean, we believe there's a greater need for Americans and everybody to be investing with a growth of America. And I've talked about it in the past. We're telling people in India, you want to invest with the growth of India. And as the capital markets grow, and one of the big things our year and our quarter really suggest, the growth of the global capital markets is accelerating. The role of the capital markets in each society is more and more countries are focusing on pillar two, pillar three retirement. So it's all intersected with retirement. So with the growth of the capital markets, BlackRock is growing alongside the world's growth and the world's capital markets. And as we democratize investing, as we get more and more people saying, keeping your money in a bank account is safe. But if it's over a 20 or 30 year horizon, it's wrong. You want to be investing with your country. And we don't talk about that. And if you think about the investors in January 1st, 2000, and the next year, we had a 40% drawdown in the stock market. But if you just invested January 1st, 2000, over the last 25 years, you had an 8% compounded return. And this is why I don't get caught up in the noise and the ups and downs in markets, because over time, if you believe that your country can grow and differentiate us, and I do believe in American exceptionalism, and I do believe that America is going to grow above trend over the next few years. And so we should have more Americans investing with a growth of America. Right. So you're a believer in capitalism. We know that. Are you concerned at all about what we've seen from the White House of late, that would seem to be things that are not necessarily in keeping with that, whether it's telling defense companies you can't return capital to shareholders, as well as telling institutions you can't buy private homes, whether it's, what am I forgetting, Carl? There's any number of other ones. Pricing, CapEx, comp, and capital returns. Those are the controls. And not to mention, of course, the Federal Reserve. I just wonder whether this government control thing is concerning to you. Let's see what happens. I'm not focusing on all the noise. I'm more focused on what ultimately happens there. But I do believe investing today is safer today than it was a year ago. Why? We have a ceasefire in Gaza. We are probably going to have some form of settlement in Ukraine that BlackRock is involved in, in terms of the reconstruction fund. I think there's so much noise, and obviously it's going to affect some trades, it's going to affect some companies, some industries. But overall, I think the bull story is more alive than some of this noise. Again, I've always felt we are too preoccupied on monetary policy and not enough conversation about fiscal discipline, fiscal policy. Well, we haven't had fiscal discipline. Yes, but we don't talk about it. But you talk about it occasionally. Where's the national debt now? Over $38 trillion, right? $38 trillion. It's growing. It's growing, and it grew last year, and it's going to grow this year. But we sit here and talk about one day it's going to matter, and I don't know when that day comes. This is one of the big issues affecting us. We have the finest capital markets in the world. The U.S. Treasury market is the benchmark worldwide. If there's any hesitation or lack of confidence related to the quality of our markets, then we are going to see that in foreign ownership in U.S. Treasuries. And that's when we may have low inflation, but elevated interest rates because our deficits are so high and we don't have enough ability to finance it. And so we have not seen that yet, and that's why we could talk about it. But at that moment, if that happens, if we just see interest rates higher than the quality of the economy, that will show up. But I believe that we are actually beginning a new growth agenda. I mean, we're going to grow maybe 5 percent in the fourth quarter. If we could just grow at 3 percent for the next 10, 15 years, despite how large our deficits seem, our debt to GDP actually shrinks.