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World's largest money manager sees a ‘market setback’ if tax reform doesn’t pass

Key Points
  • BlackRock Chairman and CEO Larry Fink says the stock market's next big move will depend on the tax reform plan's fate.
  • "If we did not get tax reform, we would have a market setback," Fink says.
Larry Fink, chairman and CEO of BlackRock.
Cameron Costa | CNBC

BlackRock Chairman and CEO Larry Fink believes the stock market's next big move will depend on the fate of the GOP tax-reform plan.

"Policy has proven to be disappointing so far. I think if we get tax reform, which I think we're going to get fourth quarter or the first quarter … I think the market will see another leg up," Fink said Tuesday on CNBC's "Squawk Box. " "If we did not get tax reform, we would have a market setback."

The has rallied 20 percent since the Nov. 8 election through Monday.

Fink, who oversees $5.7 trillion as head of the world's largest money manager, explained why he thinks the market will drop if the legislation doesn't go forward.

"That would really disprove if we can get anything done in Washington. It would put a real negative psychology onto the U.S. markets," he said.

Fink appeared from Riyadh, from the sidelines of the Future Investment Initiative, a conference presented by Saudi Arabia's sovereign wealth fund.