David Rubenstein warned the Russia-Ukraine conflict could hamper the US economy’s pandemic recovery.The Carlyle cofounder raised the prospect of more stimulus as higher interest rates sap growth.Rubenstein hasn’t bought any crypto, but he’s invested in companies servicing the industry.Get the inside scoop on what traders are talking about — delivered daily to your inbox.
David Rubenstein warned Russia’s invasion of Ukraine is hurting the global economy, underlined the inflation threat, and raised the prospect of more fiscal stimulus in the US during a recent episode of the “Invest Like the Best” podcast.
The billionaire investor and cofounder of The Carlyle Group also cautioned the Federal Reserve’s interest-rate hikes will curtail economic growth, explained why he’s become less skeptical of cryptocurrencies, and predicted the crypto trend won’t fade anytime soon.
Here are Rubenstein’s 8 best Quote: s from the interview, lightly edited for length and clarity: 1.
“Russia-Ukraine is something that’s top of mind for me, because as the global economy was beginning to recover from COVID, we now find ourselves in a free-fall a bit, in terms of the global economy.We’re seeing a dramatic decline in obviously the Russian economy and the Ukrainian economy — but it’s spilling over into the European economy, and to some extent, the US economy.Until that issue is resolved, I don’t think we’re going to really know how the global economy is going to perform over the next year or so.”
2.
“Many people are going to look at whether the US economy is now going to be needing some stimulus.It was growing back after COVID, but now it’s going to be stalling a little bit because of Russia.” (Rubenstein gave the example of US airlines not being able to fly over Russia, and the increased difficulty of shipping goods across some national borders now.)
3.
“People who haven’t had to ever worry about inflation are now beginning to do so.The price of everything you buy day-to-day is probably going to go up.” (Rubenstein expects the current bout of inflation to peak at 5% to 6% for this year.)
4.”For 25 years, our inflation rate’s been more or less 2% or less, and we couldn’t get inflation.We couldn’t buy inflation.Now we don’t have that problem, but it’s getting to the point where people are nervous about it.
And that will have an impact on the way everything is priced in this economy.”
5.”The Fed is doing the right thing, but as we do begin to increase interest rates, it will slow down the economy.And when you have inflation and high interest rates, that’s not a good combination.”
6.”I was skeptical of crypto in the beginning because I figured, ‘There’s nothing underlying this.’ But it’s clear to me now that many younger people don’t think there’s much underlying the dollar or the euro or other currencies.”
7.”If you’re in Ukraine, or you’re in Russia, and your country has lots of challenges and you want to have some assets, having some cryptocurrency probably enables you to feel better that you can have something that’s outside of the government’s control, and it’s not dependent on the bank opening up its doors to you.”
8.
“I have not bought cryptocurrencies, but I have bought companies that service the industry, because I think the genie is out of the bottle, and I don’t think the industry’s going to go away any time soon.”.