BlackRock's Larry Fink sees 'higher highs' in stocks after we get through some issues

Published Wed, Oct 13 202110:10 AM EDTUpdated Wed, Oct 13 202111:10 AM EDT

More gains could be in store for stocks, but the economy will have to overcome a few hurdles first, BlackRock CEO Larry Fink said Wednesday. "I see the big pool of assets that are in money market funds, that are sitting on the sidelines," Fink told CNBC's " Squawk Box ." "I'm very bullish over the long run … but this rotation, this consternation in the marketplace — I think that may be longer than people estimate," he said. "At the back end, when we have more understanding of how this is all going to play out, I truly believe we are going to see higher highs in the equity markets." BlackRock reported its quarterly results Wednesday , posting earnings per share of $10.95, an increase of about 19% from the prior year. The asset manager logged $5.1 billion in revenue for the third quarter, up 16% year over year. Seasonal market volatility has stocks struggling to reclaim their previous highs. Increasing inflation, labor shortages and supply chain bottlenecks have further weighed on investor sentiment. Fink said inflation is "definitely not transitory," that wage growth will be higher than many estimate and that companies will have to improve employee acquisition and retention strategies with better benefits. He added that a movement away from consumerism and toward domestic job creation will create a more inflationary regime while further pushing up wages. The "demographics of China" will also contribute to rising inflation, Fink said, noting that U.S. trade with China is at an all-time high this year and historically the country has been an avenue for low to no inflation. "They're not going to have that workforce and so I don't think we are going to see products out of China that will continue to be low priced as they were before," he said. Climate risk is another major contributor and there needs to be a "true transition in energy," he added. "Policies around the world have been more restricting supply than changing the demand curve and we're now seeing rising inflation from energy," he said. "If we continue to do the policies we're doing, it is not going to be fair and just for the entire economy."

Laurence "Larry" Fink, chairman and chief executive officer of BlackRock.

Chris Goodney | Bloomberg | Getty Images

More gains could be in store for stocks, but the economy will have to overcome a few hurdles first, BlackRock CEO Larry Fink said Wednesday.