BlackRock Inc. Chief Executive Officer Laurence D. Fink said the U.S. Federal Reserve should start reducing its unprecedented asset purchases next month or risk creating a bubble.
“I actually believe there’s a need to begin tapering,” Fink said today at the annual meeting for the Securities Industry and Financial Markets Association in New York. “That sounds like a bubble to me when you buy over 100 percent of all public and private debt issuance.”
Fink said the Fed bought about 80 percent of all public and private debt issuance in 2012. If the U.S. deficit decreases by about 30 percent as projected, the central bank will be buying more than 100 percent of debt issuance, Fink said. The Fed should continue to keep the interest rate at zero, he said.