Blackstone Group (BX) CEO Steve Schwarzman, a confidante of President Donald Trump, said in a new interview that the global economy has slowed but he remains confident the United States and China will not face recessions anytime soon.
“Global growth has softened for sure,” he says. “But certainly in the US, certainly in China, we're not having recessions.”
The comments came before a report on Friday that showed robust growth of 3.2% for the U.S economy in the first three months of the year, according to the U.S. Commerce Department. Some economic analysts warned, however, that the rapid expansion could be short-lived.
“We continue to expect that overall growth will slow this year, forcing the Fed to begin cutting interest rates before year-end,” said Paul Ashworth, an economist at the research firm Capital Economics.
While Schwarzman expects the U.S. and China to weather economic challenges over the coming months, he expressed concern about how a global slowdown could imperil Europe. Germany, long the continent’s strongest economy, said its economy will grow by just 0.5% this year, as reported last week by Economy Minister Peter Altmaier.
“Europe, ironically that’s the real problem. Everybody talks about the United States. Everybody talks about China. Hardly anybody talks about Europe,” he says.
Schwarzman made the remarks to Editor-in-Chief Andy Serwer in a conversation that aired on Yahoo Finance in an episode of “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment.
After he graduated from Harvard business school, Schwarzman joined Lehman Brothers, where he rose to managing director at age 31. In 1985, he co-founded the private equity firm Blackstone Group, which raised $830 million for its first fund. The company currently has $512 billion in assets under management and 23 offices worldwide.
‘China is not as soft as you think’
Schwarzman forcefully rebutted worries about the Chinese economy, which the country’s officials said grew 6.6% in 2018, its slowest annual rate since 1990.
“China is not as soft as you think,” he says. “They've stimulated their economy and they're not collapsing.”
Trade talks between senior officials of the U.S. and China will resume next week, the White House announced on Tuesday. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will travel to Beijing for negotiations starting April 30.
Schwarzman, who for decades has had business ties in China and runs a scholarship program at Tsinghua University in Beijing, said that the United States and China will reach a trade deal “in the next two months.”
“What we're going to have is a very good start,” Schwarzman says. “But you won't get 100% of what some people would say, well, we should get all that.”
“Like most things in American politics, you will have some divisiveness on that,” he adds.
Andy Serwer is editor-in-chief of Yahoo Finance.