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Year of Trump versus Hillary may crimp economy, Calstrs CIO says

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(Bloomberg) — A presidential matchup between Republican Donald Trump and Democrat Hillary Clinton could sap a full percentage point from anticipated growth in the gross domestic product, the chief investment officer of the second-largest U.S. pension fund said.

“Can you imagine a whole year of Trump and Hillary going at each other?” Christopher Ailman, who manages the California State Teachers’ Retirement System’s $184 billion portfolio, said Tuesday on Bloomberg Television. “It’s going to be a drag on the economy.”

Ailman said 70 percent of the U.S. economy is based on consumer sales, and a divisive presidential campaign is likely to depress consumer confidence. He didn’t comment on Clinton but said Trump’s statements “reverberate” across the global economy. The Republican real-estate mogul, who leads in all national polls for his party’s nomination, this week called for a ban on Muslims entering the U.S.

“I’m worried about 2016,” said Ailman, who has a degree in business economics. “If you took everybody’s GDP projections of 2 to 3 percent growth, I’m sad to say you could probably take a full percentage point off of that.”

Hope Hicks, a spokeswoman for the Trump campaign, did not immediately respond to an e-mail message seeking comment on Ailman’s remarks.

This calendar year has been “choppy” for investment markets, with Calstrs gaining 4.8 percent for the fiscal year that ended June 30, and Ailman said he expects 2016 to be much the same.