BlackRock's Rieder Favors 5.19% Income Plays as Warsh's Fed Signals Higher Rates, Lower Volatility
Updated
Updated · CNBC · Jul 23
BlackRock's Rieder Favors 5.19% Income Plays as Warsh's Fed Signals Higher Rates, Lower Volatility
3 articles · Updated · CNBC · Jul 23
Summary
Rick Rieder said Kevin Warsh’s Fed could keep rates higher for longer but with less rate volatility, creating a more favorable backdrop for income investors than recent cycles.
Warsh’s focus on the 2% inflation goal and broader economic direction — rather than small inflation deviations — should mean less forward guidance but more flexible use of policy tools, Rieder said.
Rieder expects the Fed to stay on hold for at least the next one or two meetings, sees no hikes as his base case for 2026, allows for a possible September move, and sees easing in 2027.
BINC, with a 5.19% 30-day SEC yield, is staying conservative on duration while favoring securitized products such as non-agency mortgages, CMBS and agency MBS over U.S. investment-grade credit.
He is also diversifying into European credit and selective emerging markets like Mexico, while using options to sell rate volatility and potentially add more rate exposure if Middle East tensions ease.