Rick Rieder, Blackrock investment director, of global fixed income, said at the beginning of this week that the current backdrop represents the “best investment environment”, citing unusually favorable dynamics in capital markets and bonds.
Speaking in CNBC, Rieder described “extraordinary” technical conditions in shares, with billions of dollars still parked in monetary market funds and robust corporate repurchases that are reduced to the available offer. Although the valuations for the largest technological names in the market remain high, he said that the growth of profits outside Tesla helped justify the multiples. “The interannual MAG-7 is like 54%,” he said, added that the rhythm makes the sector difficult to ignore.
On the bond side, Rieder highlighted the appeal of income.
Investors can still build portfolios that produce between 6.5% and 7%, a level that described as highly attractive in a world where inflation has moved below 3% in a nucleus form. He argued that while the Federal Reserve has space to reduce rates, potentially that begins as soon as September, current yields already offer investors solid returns.
Volatility ‘Loca Baja’
Rieder also emphasized unusually moderate volatility today. He described the volatility of commercial capital, or “vol”, at levels close to 9.5 to 10, which called “Low crazy.” Low volatility, he said, makes the coverage against the downward risk relatively cheap, which gives investors what he called a “escape hatch” if the conditions are the conditions. “You don’t really have to run down the down,” Rieder said.
Even so, Rieder warned that complacency is his greatest concern. With insurance in such economic markets, it sees signs of investors that investors may be underestimating risks, particularly in credit differentials and other fixed income corners.
Fed interest rate
In monetary policy, Rieder argued that Fed rates increases have done little to suppress inflation, since large corporations depend less on loans to finance investment.
The real drag, he said, has been in the activity of housing and low -income homes that depend more on credit. He warned the too high rates, runs the risk of imposing excessive costs on government and homes without significant disinflar profits.
He believes that the Central Bank could reduce the fund rate by up to 100 basic points during the next year, a movement that considers the inflation given the low structural volatility and the growing productivity of advances in the data, hyperscale computing and even space -related technologies.
“There is something spectacular around productivity,” he said, calling him a unique dynamic in the generation.
For cryptographic investors, Rieder’s comments reinforce a broader narrative: an environment with fall rates, wide liquidity and low volatility could support the appetite renewed by risk assets beyond actions. If your call is correct, the same technical tail winds that conduct higher shares could spill into digital assets that prosper in excess cash and take risks of investors.
