BlackRock's Rieder Sees 7% Bond Yields as Historic Opportunity in A-Rated Credit
Updated
Updated · CNBC · Oct 21
BlackRock's Rieder Sees 7% Bond Yields as Historic Opportunity in A-Rated Credit
3 articles · Updated · CNBC · Oct 21
Summary
More than 7% yields are now available in a diversified, under-three-year bond portfolio averaging A- quality, Rick Rieder said, calling that setup "historic" because default risk remains low despite market volatility.
Investment-grade corporates are his preferred trade, especially hyperscaler issuers whose AI build-out has driven about $228.4 billion of bond sales this year from Alphabet, Amazon, Meta and Oracle.
BlackRock's BINC fund has already raised its investment-grade corporate allocation to 14.3% from 8.5% in July, though Rieder said investors should expect rate swings and hold positions for at least a year.
Outside high-quality credit, he urged more caution as AI-linked debt has strained weaker borrowers such as junk-rated CoreWeave and pressured lower-rated parts of the market.
A likely December Fed hike and a $2 trillion U.S. fiscal 2026 deficit could keep government yields elevated, while heavy AI and public-sector issuance risks crowding out other borrowers.