Investing.com -- BlackRock (NYSE:BLK) CEO Larry Fink warned that vast amounts of capital are sitting idle in cash as global investors grow increasingly cautious over the United States’ fiscal outlook and the uncertainty surrounding its trade policies.
Speaking at the Saudi-U.S. Investment Forum in Riyadh on Tuesday, Fink highlighted the scale of uninvested assets, pointing to $11 trillion parked in U.S. money market funds and €12 trillion sitting in European bank accounts. “When there is uncertainty, you are going to keep more and more money in cash and that is what we witnessed,” he told delegates.
The comments come as U.S. President Donald Trump begins a tour of Gulf nations, with stops in Saudi Arabia, Qatar and the United Arab Emirates aimed at strengthening economic and security ties. Trade relations, particularly with China, remain a source of market unease despite a temporary pause in tariff escalation.
Fink, who leads the world’s largest asset manager, noted that while global investors remain heavily exposed to U.S. assets, some reallocation is underway. A “modest reallocation” has benefited Europe and spurred increased interest in markets such as the Gulf, India and Japan.
Still, the backdrop remains volatile. “I think we are going to be in a period of uncertainty and we are going to start focusing on the role of deficits, which are not part of any conversations,” Fink said. “Let’s be clear, the U.S. deficits are an issue.”
He cautioned that the U.S. needs to sustain a 3% growth rate to manage its deficit levels. “I do believe what President Trump is trying to do is consistent with what the kingdom has been trying to do, they are trying to create more public-private investing,” he added.
Fink also praised Saudi Arabia’s Vision 2030 transformation agenda, calling it a roadmap for building a diversified economy capable of becoming a “21st century global leader.”
Blackstone (NYSE:BX) CEO Stephen Schwarzman, also present at the forum, acknowledged the challenges in implementing such an ambitious reform program but encouraged persistence. “You are going to accomplish a lot of these things… but like all great visions, some of them won’t happen and you can’t get discouraged because that is the nature of major change,” he said.