BlackRock’s Chief Funding Officer for International Mounted Earnings, Rick Rieder, says the Fed won’t rush to chop rates of interest after the newest jobs report, regardless of market pricing suggesting in any other case.
Talking in a current interview, Rieder acknowledged the energy in fairness markets, describing the present panorama as “the very best buying and selling setting he’s seen in a very long time.” Nevertheless, he warned that traders ought to stay tactical and take into account draw back safety methods as sentiment fuels positive factors.
“We’re seeing lots of foam,” Rieder mentioned. “You’ll be able to experience that out slightly bit, preserve your beta excessive however purchase some draw back safety. That is an emotion-driven market.”
Nonetheless, Rieder expressed skepticism about market expectations for greater than 4 fee cuts by the tip of the yr. With some financial indicators softening and the quick finish of the yield curve pointing to simpler coverage, Rieder believes the Fed will stay extra cautious.
“I feel this Fed will wait,” he mentioned, including: “You take a look at employment and inflation, core CPI is working round 3%, it’s not screaming for a fee lower. Particularly after as we speak’s knowledge.”
Whereas Rieder sees the potential for a fee lower window to open later within the yr, maybe at or after the June assembly, he rejected the concept that present knowledge justifies speedy motion. “It might be presumptuous to say they’re going to chop based mostly on as we speak’s knowledge,” he mentioned.
*This isn’t funding recommendation.
