Blackstone CEO: Recession Unlikely After Election

The U.S. likely will avoid a recession no matter who wins the presidential election, a prominent businessman said.

Blackstone CEO Stephen Schwarzman, who earlier this year endorsed Donald Trump, said neither the former president nor Vice President Kamala Harris will face a recession.

"I don't see a recession risk because the economy is pretty strong and both of the candidates keep mentioning a lot of stimulative policies," Schwarzman told Bloomberg on Wednesday in Tokyo. "But time will tell as to what anybody actually will be able or want to do."

Rising inflation in recent years helped fuel talk of a recession. In addition, a recent Gallup poll found that the economy is the most important issue to voters in the presidential election.

However, inflation has cooled to below 3% in recent months from a 40-year high of more than 9% in mid-2022. Also, key indicators such as GDP growth, job numbers, and retail sales have proven resilient.

Late last month, Federal Reserve Chair Jerome Powell said the U.S. economy and hiring are largely healthy and emphasized that the Fed is "recalibrating" its key interest rate, which is now at about 4.8% The Fed reduced interest rates in September and signaled that more cuts are coming.

"It's really about interest rates and economic growth," Schwarzman told Bloomberg of the economy. "Interest rates will continue to go down and that'll provide an impetus of more transactions both on the buy and the sell."

The Wall Street billionaire endorsed Trump in May. He cited rising antisemitism, as well as economic, immigration, and foreign policies headed in the "wrong direction."

Trump has proposed extending his 2017 tax cuts that are set to expire, reducing the corporate tax rate to 15%, eliminating income taxes on Social Security benefits, and ending taxes on tips.

Harris has backed raising the corporate income tax rate to 28%, and has suggested expanding the child tax credit, earned income tax credit, and small business tax deductions. She also has pitched up to $25,000 in financial assistance to qualified first-time homebuyers.

Bank of America CEO Brian Moynihan agreed with Schwarzman's assessment.

"With an unemployment rate at 4% and wage growth at 5%, it's hard for an economist to convince the world there's going to be a recession," Moynihan told Bloomberg TV on Wednesday.

Blackrock's Larry Fink this week said the presidential election "doesn't matter" to the long-term market outlook.

The Associated Press contributed to this story.

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