Rick Rieder, BlackRock global fixed income CIO and head of global allocation team, join ‘Fast Money Halftime Report’ to discuss the uncertainty in the market, inflation fears and how it affects the investment strategy. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi
BlackRock’s Rick Rieder told CNBC on Thursday he was not overly concerned about stocks simply because of the recent move higher in bond yields.
Rieder, chief investment officer of global fixed income at the world’s largest money manager, made his remarks on “Halftime Report” as the major U.S. equity indexes fell sharply. The tech-heavy Nasdaq Composite declined furthest, down more than 2.5%.
The 10-year Treasury yield rose to a one-year high above 1.6% at one point Thursday. However, Rieder said it’s important to take the uptick in yields — which move inversely to prices — in historical context, particularly when forecasting a strong economic recovery from the Covid pandemic.
He pointed to the inflation-adjusted yields, known as real rates, to illustrate his perspective.
“We started from negative 1%. The history of real rates, on average the last 25 years, the average has been about 1.5% positive and usually, when you get this sort of economic growth, you’re talking about real rates that go to 3%, 4%, 5% positive,” Rieder said. “We may get to zero percent real rates, so you still have an extremely accommodative environment. There’s a little bit of uncertainty, the [volatility] picks up in the markets and then you recalibrate, but I’m not that worried about equities.”
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