Published by Global Banking & Finance Review®
Posted on January 23, 2025
3 min readLast updated: January 27, 2026
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Norway's wealth fund CEO warns of US inflation risks in 2025, citing sovereign debt concerns and regulatory differences between US and Europe.
By Elisa Martinuzzi
DAVOS, Switzerland (Reuters) - The chief executive of Norway's $1.8 trillion sovereign wealth fund, one of the world's largest investors, said on Thursday that inflationary pressure in the United States was one of the biggest risks to financial markets this year.
President Donald Trump has vowed to hit European, Chinese, Canadian and Mexican companies with tariffs, which would likely trigger retaliatory action on U.S. ones.
Trump is also rolling back regulation, such as on oil and gas drilling, which is expected to increase economic activity.
Fund CEO Nicolai Tangen also said sovereign debt levels globally posed a risk to financial markets.
It is "whether you get to a point where investors think that government debt is generally too high...and they want a much higher coupon to finance governments", he said during a Reuters NEXT Newsmaker interview at the World Economic Forum in Davos.
Tangen did not name specific countries but said the threat was widespread. "We are seeing it in many countries," he said.
Saving petroleum revenue for future generations, the wealth fund has a value more than three times that of Norway's annual gross domestic product, and bigger than Australia's economy.
EUROPE VS UNITED STATES
The fund holds stakes in close to 9,000 companies, representing 1.5% of the world's listed equities. Half of its investments are in the U.S. while a third are in Europe.
There is a stark difference between U.S. and European companies, Tangen said, with U.S. CEOs overall optimistic about regulation being rolled back and saying business was better, while European CEOs were downbeat.
"You meet the Americans, it...is a real party. You meet the Europeans, it is like at a funeral."
Tangen welcomed recent European focus on reducing regulation, particularly in terms of competition, to allow bigger players.
"There is more focus on making ... stronger individual companies, which can compete with the American companies," he said.
ESG
The fund remains committed to environmental, social and corporate governance, Tangen said, days after Trump took steps to take the U.S. out of the Paris climate agreement and end diversity policies in federal agencies.
"We do not agree that one should roll back climate efforts, that one should stop looking at diversity issues," Tangen said, adding that the long-term effect would be negative.
Asked about a potential increase in conflicts of interest between U.S. businesses and policymakers, Tangen said it was something the fund thought about but it tried to work on a company-specific basis.
In response to Switzerland considering a cap on the number of foreigners who could be directors at UBS, in which the Norwegian fund is a top investor with 4.84% of shares according to fund data, Tangen said it wanted to have the "best people" on the board.
The fund would also continue to discuss issues such as fact-checking with Meta Platforms and other U.S. tech companies. It owns 1.18% of Meta, according to fund data.
Meta CEO Mark Zuckerberg on Jan. 7 scrapped a U.S. fact-checking programme and reduced curbs on discussions around contentious topics such as immigration.
"That's one of the things we would typically discuss with them because it's in our expectation documents," Tangen said. "It's important to do these things."
(Reporting by Elisa Martinuzzi in Davos; writing by Gwladys Fouche in Oslo, editing by Terje Solsvik, Kirsten Donovan)
The main topic is the risk posed by US inflationary pressure to financial markets in 2025.
Sovereign debt levels globally are a risk, potentially leading to higher financing costs for governments.
The fund remains committed to ESG principles despite recent US policy changes.
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