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☆ BlackRock’s Rieder highlights a fresh worry for investors beyond the Fed’s expected rate hike
▼ + stars: | 2023-05-02 | by ( Jason Gewirtz | ) www.cnbc.com time to read: +3 min

BlackRock's Rick Rieder predicts the Federal Reserve will hike interest rates by a quarter point on Wednesday and then stop. Tuesday kicks off the Fed's two-day meeting, which will culminate in a rate decision announced at 2 p.m. The policy-setting Federal Open Market Committee has been hiking rates since March 2022 in a bid to cool higher prices. "I don't think there's tangible pressure on the U.S. economy," Rieder said. Rieder is confident in the overall market, but he is in the camp that "the economy can move into a technical recession."

☆ Russia’s battered wartime economy is still chugging along as it taps its wealth fund, raises taxes, and ramps up imports
▼ + stars: | 2023-05-01 | by ( Phil Rosen | ) www.businessinsider.com time to read: +5 min

Shares of First Republic dropped more than 40% in pre-market trading today, while JPMorgan stock ticked 2.9% higher. Let's check in on Russia's wartime economy. To the surprise of many forecasters, Russia's economy has held up better than expected as it carries on into the second year of its war on Ukraine. And leaked documents, first reported by the Washington Post, suggest that Russia can fund its war for at least another year. Specifically, US intelligence says Moscow can rely on its sovereign wealth fund to help pay for its war efforts, as well as higher corporate taxes and ramped-up imports.

☆ BlackRock bond chief Rick Rieder manages $2.7 trillion and just took home a Morningstar award for best portfolio manager. He told us how he's investing as the economy fades.
▼ + stars: | 2023-04-28 | by ( Marley Jay | ) www.businessinsider.com time to read: +4 min

As head of BlackRock's fixed income unit, Rick Rieder is responsible for $2.7 trillion. He told Insider he expects the recent banking crisis to slow the US economy by about 0.5% this year. Rick Rieder of BlackRock has long been one of the biggest names in the bond market, and now he's bringing home some hardware to back up his credentials. Rieder's flagship BlackRock Total Return Fund is still ahead of its competition this year, delivering a 4.4% return in a difficult bond market. Rieder said the US economy is still healthy, but he expects that strength to fade — and is adjusting his portfolios accordingly.

Paradoxically, however, in previous debt ceiling crises investors have sought protection from the economic risks of a default by piling into U.S. long-term Treasuries. "If you go through a debt ceiling crisis, it's a global crisis ... And the flight to quality ends up being in U.S. Treasuries," Rieder told Reuters in an interview. "The debt ceiling is certainly part of it," he said, adding other recent steps were an overall reduction of risk in the portfolio, including in credit. The U.S. House of Representatives will vote on a Republican bill to raise the U.S. government's $31.4 trillion debt ceiling and slash spending on Wednesday. "It's so hard to foresee how far down the road this debt ceiling is going to take us," Rieder said.

☆ Morning Bid: Glass half full on disinflation
▼ + stars: | 2023-04-11 | by ( ) www.reuters.com time to read: +4 min

Headline March consumer price inflation is expected to drop as low as 5.2% from 6% - showing the disinflation journey from more than 40-year highs of 9.2% last June to the Fed's 2% target more than half way there. The rider is that headline inflation rates are expected be below stickier annual 'core' rates, which are forecast to have ticked higher to 5.6% last month. The International Monetary Fund's updated World Economic Outlook is also due on Tuesday ahead of the Fund's Spring meeting in Washington. The disinflation picture was encouraged around the world on Tuesday as Chinese consumer price inflation hit an 18-month low last month and the annual decline in factory prices sped up. Hopes that central bank rates are cresting worldwide lifted risk appetite across the spectrum with major cryptocurrency bitcoin broke back above $30,000 level for the first time in 10 months on Tuesday.

"Presumably, this will also see a cessation of Fed policy rate hikes after one more possible hike at the May meeting, although it’s also possible the Fed is done already," he added in an emailed statement to Reuters. For now, traders take a more dovish view and are betting policymakers will cut rates later in the year, taking the fed funds rate to 4.35% from its current 4.75% to 5% range. Investors will be closely watching an inflation report on Wednesday to gauge the near-term trajectory for interest rates. According to Rieder, inflation should ease going forward, in line the economic slowing seen last month. "Hopefully ... markets can look forward to a more relaxed Fed from here," he said.

The Fed raised its benchmark overnight interest rate by a quarter of a percentage point on Wednesday, the ninth straight policy meeting that ended with a rise in borrowing costs since the current tightening cycle began in March 2022. "It's really ... a question of not knowing at this point," Powell told reporters after the meeting. This is 12 days ago," that a pair of bank failures reshaped the financial landscape facing the central bank, with potential implications for the real economy and the path of inflation. The U.S. Senate Banking Committee is holding hearings on the bank failures next week. "The challenges facing the (Federal Open Market Committee) today ... take on a particular aura of complexity."

☆ BlackRock's Rieder says more volatility could 'play through the financial system'
▼ + stars: | 2023-03-21 | by ( Patti Domm | In | ) www.cnbc.com time to read: +6 min

"My sense is there's still some volatility that's going to play through the financial system." "You've got clearly some additional economic contraction coming from a banking system that is going to pull back on some lending." I think spreads got too tight and I think the market was a little overzealous in all assets," Rieder said. Prior to the failure of Silicon Valley and Signature Bank, Rieder had anticipated the yield would range between 3.50% and 4.25%. Rieder expects the Fed will raise rates by a quarter point and could hike again by another 25 basis points before stopping.

Commodity Futures Trading Commission (CFTC) data published on Tuesday shows that speculators held the largest net short position in three-month 'SOFR' rate futures since September, and the biggest net short 10-year Treasuries futures position since 2018. While they trimmed their net short 2-year Treasuries futures position, it was only a reduction of around 5% from the record short a couple of weeks earlier. They trimmed their two-year futures net short to 656,575 contracts - two weeks prior they were net short 696,686 contracts, a record. chartA short position is essentially a wager that an asset's price will fall, and a long position is a bet it will rise. In bonds and interest rates, yields and implied rates fall when prices rise, and move up when prices fall.

☆ Wall St relieved after inflation data but warns Fed’s fight not over
▼ + stars: | 2023-03-14 | by ( Lewis Krauskopf | ) www.reuters.com time to read: +4 min

February’s inflation report showed consumer prices rising by 0.4%, with a year-on-year increase of 6% - in line with analysts expectations, but far above the 2% rate the Fed hopes to achieve. The CPI report "was pretty much as expected. We're at a point of market anxiety where expected is good," said Rick Meckler, partner at Cherry Lane Investments. The CPI report was not all good news. The CPI report “wasn’t worse than expected,” he said.

☆ Premarket stocks: From Wile E. Coyote to edibles: Recession forecasts are getting weird
▼ + stars: | 2023-03-13 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +12 min

And for the US economy, it could likely mean a “Wile E. Coyote moment,” Summers said — if we run off the cliff, gravity will eventually win out. AntibioticsWhen describing the state of the economy, Summers doesn’t just rely on Looney Tunes. “Will working people be better off if we just walk away from our jobs and inflation remains 5% or 6%?” Powell replied. Before the Bell: Is it necessary to increase the unemployment rate to successfully fight inflation? In a related action, the government shut down Signature Bank, a regional bank that was teetering on the brink of collapse in recent days.

Ahead of the crucial non-farm payrolls report on Friday, data showed U.S. private payrolls increased more than expected in February, pointing to continued labor market strength. BlackRock's chief investment officer of global fixed income, Rick Rieder, said the Fed could raise rates to 6% and keep them there for an extended period of time to fight inflation. "Unless we get some data over the course of the next two weeks, we really don't know which way we should be landing. Unfortunately the most important piece of the data doesn't come until Friday, that's why we've got a market that's meandering a bit." ET, Dow e-minis were up 33 points, or 0.1%, S&P 500 e-minis were up 4.25 points, or 0.11%, and Nasdaq 100 e-minis were up 19.75 points, or 0.16%.

Traders drastically increased their bets that the U.S. central bank will raise rates by 50 basis points later this month, with money market futures pricing in a 64.1% chance of such a move. BlackRock's chief investment officer of global fixed income, Rick Rieder, said the Fed could raise rates to 6% and keep them there for an extended period of time to fight inflation. ET (1315 GMT) is expected to show private employers hired 200,000 workers in February after adding 106,000 jobs in January. Occidental Petroleum Corp (OXY.N) gained 3.1% after Warren Buffett's Berkshire Hathaway Inc (BRKa.N) increased its stake in the oil company to about 22.2%. Reporting by Sruthi Shankar in Bengaluru, additional reporting by Amruta Khandekar Editing by Vinay DwivediOur Standards: The Thomson Reuters Trust Principles.

☆ Futures edge higher after Wall St selloff on Powell remarks
▼ + stars: | 2023-03-08 | by ( ) www.reuters.com time to read: +3 min

Traders drastically increased their bets that the U.S. central bank will raise rates by 50 basis points later this month, with money market futures pricing in a 64.1% chance of such a move. BlackRock's top fixed-income investor Rick Rieder said the Fed could raise rates to 6% and keep them there for an extended period of time to fight inflation. ET (1315 GMT) is expected to show private employers hired 200,000 workers in February after adding 106,000 jobs in January. Occidental Petroleum Corp (OXY.N) gained 2.5% after Warren Buffett's Berkshire Hathaway Inc (BRKa.N) increased its stake in the oil company to about 22.2%. Reporting by Sruthi Shankar in Bengaluru, additional reporting by Amruta Khandekar Editing by Vinay DwivediOur Standards: The Thomson Reuters Trust Principles.

Ahead of the crucial nonfarm payrolls report on Friday, data showed U.S. private payrolls increased more than expected in February, pointing to continued labor market strength. A closely watched part of the U.S. Treasury yield curve saw its deepest inversion in more than 40 years on Tuesday. "Unless we get some data over the course of the next two weeks, we really don't know which way we should be landing. Unfortunately the most important piece of the data doesn't come until Friday, that's why we've got a market that's meandering a bit." BlackRock's chief investment officer of global fixed income, Rick Rieder, said the Fed could raise rates to 6% and keep them there for an extended period of time to fight inflation.

☆ BlackRock says there's a good chance the Fed will have to hike interest rates to 6%, the highest level in 20 years
▼ + stars: | 2023-03-08 | by ( Zinya Salfiti | ) www.businessinsider.com time to read: +3 min

There's a reasonable chance the Fed will hike interest rates to 6% and keep them there, a BlackRock CIO said. Sticky inflation and a strong labor market are factors pushing the Fed to keep hiking, Rick Rieder said. Stocks sold off after Fed Chair Jerome Powell lifted expectations for higher interest rates ahead. Sign up for our newsletter to get the inside scoop on what traders are talking about — delivered daily to your inbox. The Fed has lifted rates from near zero last March to as much as 4.75% today, in a bid to bring inflation down to its target 2% rate.

☆ BlackRock says the Federal Reserve could hike interest rates to a peak of 6%
▼ + stars: | 2023-03-08 | by ( Jihye Lee | ) www.cnbc.com time to read: +1 min

Rick Rieder, managing director and chief investment officer of fundamental fixed income for BlackRock Inc., speaks during the Institute of International Finance Annual Membership Meeting in Washington, D.C., U.S., on Friday, Oct. 11, 2013. The world's largest asset manager sees the U.S. federal funds rate peaking at 6% after Fed Chair Jerome Powell warned interest rates are likely to head higher than the central bank previously expected. "We think there's a reasonable chance that the Fed will have to bring the Fed Funds rate to 6%, and then keep it there for an extended period to slow the economy and get inflation down to near 2%," BlackRock's chief investment officer of global fixed income Rick Rieder wrote in response to Powell's testimony before the Senate Banking Committee on Tuesday. The economy is more resilient than expected, Rieder said, pointing to the most recent jobs report and consumer price index reading. "This is partly due to the fact that today's economy is no longer as interest-rate sensitive as that of past decades, and its resilience, while a virtue, does complicate matters for the Fed," he wrote in the note.

☆ BlackRock sees 'reasonable chance' of Fed raising rates to 6%
▼ + stars: | 2023-03-07 | by ( Davide Barbuscia | ) www.reuters.com time to read: +1 min

Federal Reserve Chair Jerome Powell told U.S. lawmakers on Tuesday that the U.S. central bank could become more aggressive in its rate hike path following recent strong economic data. "We think there’s a reasonable chance that the Fed will have to bring the Fed Funds rate to 6%, and then keep it there for an extended period to slow the economy and get inflation down to near 2%," Rieder said in a note on Tuesday. Goldman Sachs said in a note on Tuesday that it had raised its forecast for the so-called terminal rate by 25 basis points to a range of 5.5%-5.75%. That data revived fears the Fed may resort once again to the same super-sized interest rate hikes that hammered stocks and bonds last year. Traders had largely expected the central bank to raise rates by 25 basis points at its next rate-setting meeting on March 21 to 22, but after Powell's remarks on Tuesday Fed funds futures were pricing in a 50 basis points hike, CME Group data showed.

☆ Here's why 2023's stock rally could fizzle out and end up burning bullish investors
▼ + stars: | 2023-02-06 | by ( Phil Rosen | ) www.businessinsider.com time to read: +5 min

Now let's turn to the stock market. Traders gather on the floor of the New York Stock Exchange, Friday, March 18, 2016. The surging stock market suggests that investors are fairly optimistic these days. In a Friday note, strategists said the stock market is set to peak in the next two weeks because inflation could come roaring back. US stock futures fall early Monday, after Friday's strong US jobs report fueled speculation that interest rates will rise further.

☆ Despite 'extraordinary' 2023 rally, stocks are just OK, BlackRock's bond chief says
▼ + stars: | 2023-02-03 | by ( Morgan Chittum | ) www.businessinsider.com time to read: +2 min

BlackRock's bond chief Rick Rieder says the stock market rally has been "extraordinary," but he isn't overly bullish on equities just yet. Stocks have been on a tear since the start of the year, with the Nasdaq ahead 17% in the past month. "I think January was one of the most extraordinary months I've seen in my career," Rick Rieder, BlackRock's' global fixed income CIO, told Bloomberg TV on Friday. "The short covering rally in places that had been beaten down a month prior was pretty extraordinary." Despite the stock market outperformance of the companies that fell short on earnings, he said he would still buy companies with "quality income."

☆ BlackRock's Rieder says investors should hold more bonds, international stocks should outperform
▼ + stars: | 2023-02-01 | by ( Patti Domm | In | ) www.cnbc.com time to read: +4 min

BlackRock's Rick Rieder said the 60/40 portfolio should be flipped to 40% stocks, 60% bonds this year, and that international stocks should outperform U.S. equities. Rieder, chief investment officer for global fixed income at the world's largest asset manager, said he finds U.S. stocks less interesting relative to bonds. Both stocks and bonds were sharply lower, and the traditional benefits of one asset class hedging the other did not work. International stocks over U.S. equities International stocks could also outpace U.S. stock. I like some the global equities a lot more than the U.S." He also is looking to global fixed income markets.

☆ Fed expected to slow rate hiking to a quarter point but will stay unrelenting in inflation battle
▼ + stars: | 2023-01-31 | by ( Patti Domm | In | ) www.cnbc.com time to read: +4 min

"He's going to do that by still saying the Fed's going to stay tight for a while. The Fed's rate hike Wednesday would be the eighth since last March. That is just a half percentage point away from the Fed's estimated end point, or terminal rate range of 5% to 5.25%. In the futures market, fed funds futures continued to price a terminal rate of less than 5%. "I think he's going to be hawkish relative to market pricing," said Jim Caron, head of macro strategies for global fixed income at Morgan Stanley Investment Management.

In that light, the Fed's interest rate hiking cycle is close to an end. That is still well above the Fed's target, but the speed and direction of travel since June's four-decade high of 9.1% is clear. U.S. breakeven inflation rates - the gap between yields on inflation-protected Treasuries and regular notes - reflect this. The two-year breakeven inflation rate this week fell as low as 2.02%, the lowest since December 2020. This will drive down the average inflation rate, whatever the time horizon.

They projected their key policy rate would top out at between 5.00% and 5.25% this year, up from a current 4.25%-4.50% rate. Market pricing indicates investors remain wedded to a more dovish view, with the policy rate peaking below 5% around mid-June before falling in the second half of the year. Rieder believes policymakers will raise rates by 25 basis points at the next two meetings, with further 25 basis point increases possible, depending on data. Investors in short-term options had priced in a much sharper move of about 2% going into Thursday's CPI print, according to data from market maker Optiver. Tiffany Wilding, PIMCO's North American economist, believes the Fed is likely to raise rates just two more times this year before pausing.

☆ It's 'foolhardy' to think the Fed will cut interest rates at all in 2023, BlackRock's bond chief says
▼ + stars: | 2023-01-10 | by ( George Glover | ) www.businessinsider.com time to read: +4 min

It's "foolhardy" to expect Federal Reserve interest rate cuts this year, BlackRock's bond chief said. Meanwhile, the US economy added a better-than-expected 263,000 new payrolls last month, which suggests that the Fed still has scope to raise interest rates further without unemployment surging. "There's been a series of projections that in '23 they'll start tightening and then start easing again," he added. "I don't think you'll see that, because you need to see data really soften first and inflation come at target. Stocks traded mixed Monday after Daly and Bostic signaled the Fed will hold interest rates at above 5% for much of 2023.

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