Rick Rieder, Director of Global Fixed Income Investments at BlackRock, projects that the Federal Reserve (FED) could cut interest rates twice this year.
The statement comes in a context where inflation shows signs of moderation. “It's getting harder and harder for them to do it, but I still think they can do it,” Rieder said during an interview with Bloomberg Television.
Recently, markets reacted to economic data that exceeded expectations, particularly following the release of the March consumer price index. This scenario has pushed Treasury bond yields to their highest 2024 levels, influencing market expectations.
BlackRock Global Fixed Income CIO Rick Rieder says the firm has brought down its interest rate exposure https://t.co/rIu2Nln0KH pic.twitter.com/sQcUe6SzeI
—BloombergTV (@BloombergTV) April 22, 2024
Swap traders currently anticipate approximately 40 basis points of interest rate cuts by the end of the year, which equates to less than two full 0,25% cuts.
Regarding its internal strategy, BlackRock has adjusted its exposure to interest rate risk, favoring short-term investments. According to Rieder, the manager sees a possible window of opportunity for a change in approach in the near future.
“After seeing some good inflation reports and evidence that employment is slowing down, we can start to extend the deadline,” he explained, indicating that a change in investment strategy may depend on upcoming economic data.
