(Bloomberg) -- Blackstone Inc. Chief Executive Officer Steve Schwarzman said he expects the Federal Reserve to lower interest rates and sees “animal spirits” returning to the markets as more investors make that bet too. 

The Fed’s timing on rate declines won’t be clear, creating a “baffling effect” among investors, he said in an interview Thursday with Bloomberg TV on the sidelines of the World Economic Forum.

Nonetheless, “the expectation that interest rates are going down is creating animal spirits again,” he said, referring to the role that emotions play in the financial markets.

Schwarzman said the pace of private equity investments is picking up at the world’s biggest alternative asset manager. The firm is also interested in doing deals with leveraged holders of European real estate that need to dispose of properties to generate cash, he added.

The billionaire Republican donor said he’s still waiting to decide which presidential candidate to back this year. As the presidential rate heats up in states, Schwarzman is among other wealthy financial executives who are keeping people guessing about which candidate they’ll put their checkbooks behind. 

“I’d like to see what the public thinks rather than what I think,” he said. “I just want to see how the game plays out.” 

When asked how he thought the US would fare if President Joe Biden leads the US another term, Schwarzman called out the country’s deficits and said the administration’s border policy hasn’t been welcomed by many.

“I don’t know if the country, frankly, is prepared for four more years of that,” he said. “Those things all poll very negatively.” 

--With assistance from Francine Lacqua.

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