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Bloomberg

BlackRock's Wei Li Is Investing for the Here and Now

00:00 Is it getting harder to find a long term macro anchor in this environment? Well, long, long term macro anchors have been lost. You look at inflation anchors, you look at long term growth anchors. You look at its long term fiscal anchors. You look at even anchors institution confidence like the safe haven status of the dollar, but maybe also independence of the Fed. So it's really hard to find long term macro anchor, which is why we actually think that it's easier to think about tactical as allocation because of immutable laws around the U.S. debt and global supply chain. Paradoxically, there is greater certainty in our assessment in the near term than in the long term, which is the opposite of what has been always the case. Which is why we're moving risk targets in terms of the budget deployment from a longer term strategic asset allocation. Two words tactical asset allocation. This is one of the best tactical investment environments. So what's the tactical approach currently for you in the team? Right now we are investing for the here and now, which is to recognize that so far this year we have focused a lot on tariffs and we're still focusing on tariffs, which is very different from Trump term one, where we had tax cuts first and then we had tariffs. But now focus is going to shift also towards tax cuts, also towards deregulation, potentially unleashing animal spirits and yes, tariffs. Headlines are still flying around, but we do think that because of the constraints and immutable laws that I just talked about, we're going to get to some sort of lending support, not likely derailing the tactical kind of the risk long view that we still have. So right now, we still like U.S. equities. And I would observe that at this juncture is no longer consensus as the investors across the world, Europe, the APAC, I would think that it's more divisive right now, but we still like it, the condition for sustained rest of the world. Europe outperformers over U.S. having been met, which is why we're not we haven't chased the European equity outperformance beyond closing the underweight to neutral earlier in the year.