Rieder Says Rates Not Going Far, Stocks to Grind Higher

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Bloomberg Jul 7 23:53 · 26k Views

Rick Rieder, BlackRock CIO of global fixed income, says the current environment provides a pretty good opportunity to take advantage of markets on Bloomberg Television.

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Transcript

  • 00:00 Where can bonds go from here?
  • 00:01 Are we just forever stuck in this range if the Fed is on track to do that tweak instead of an actual large cutting cycle?
  • 00:10 So I mean, I've been doing fixed income for a really long time.
  • 00:13 I mean, one of the beauties of fixed income today is we're going to be in a higher rate environment for a period of time.
  • 00:17 Your ability to clip coupon and income.
  • 00:19 And we run a
  • 00:19 bunch of funds here clipping 6 1/2 to seven
  • 00:22 real income and a real yield.
  • 00:25 And that, you know that quite frankly, I'd love that to stay there for a while.
  • 00:28 My guess is you're probably going to come, you're going to take 50 to 100 base points off that over the next
  • 00:34 over the next six months to a year.
  • 00:36 And
  • 00:37 I know, but that's the environment we're in and which is pretty good.
  • 00:39 I mean, if you're,
  • 00:40 you know, in a world where you're where you'd like to get some income equities have had
  • 00:43 quite a good run.
  • 00:45 I mean, that's a pretty good place, man.
  • 00:46 I call it the golden era fixed income.
  • 00:48 I mean, not not because rates are going to drop and we're going to be a significant bull market rally, but gosh, to create this sort of yield and
  • 00:55 have a sense of the central bank's not going to be raising rates anymore.
  • 00:57 By the way, not just the Fed, the ECB, the Bank of England, other than the Bank of Japan,
  • 01:01 we're in a global easing cycle.
  • 01:03 It's just a gradual 1.
  • 01:04 Not, not bad if you want to create some income.
  • 01:07 And it is that Goldilocks has playing through markets.
  • 01:10 The tension, Rick, has been
  • 01:12 from politics, it's going to be a heavy weekend of seeing how Biden performs in an ABC interview with George Stephanopoulos.
  • 01:18 But it's allowed traders to start to look for Trump, to start to look for a curve steepening that was interrupted by the economic data.
  • 01:26 So how do you look at these two?
  • 01:27 Is it too early to start trading in some of the political ramifications for 2025 or will that continue to pressure some of the economic, the starting of slowing that is currently rippling through bond markets?
  • 01:42 So this is a year that is, I saw staff the other day that there was pretty extraordinary 80% of the market cap in the world is going to have an election in 2000 and 2460% of GDP is going to have an election in 2024.
  • 01:53 So elections are going to drive
  • 01:54 bond market, equity market.
  • 01:56 And you think about particularly US,
  • 01:59 you have a dynamic where you're talking about very different tax policy, very different fiscal policy potentially.
  • 02:04 By the way, you don't know what Congress is going to be.
  • 02:06 One man's opinion.
  • 02:08 It's a pretty good opportunity.
  • 02:09 You get extreme moves on one side when one party takes the lead or, or,
  • 02:14 or performs well or doesn't.
  • 02:15 And it's been a pretty good environment to take advantage of going the other way because we're, we're still
  • 02:20 not in October yet
  • 02:22 and we're, we're on the doorstep of the election.
  • 02:24 And by the way,
  • 02:25 we've had a French election, we just had auk election.
  • 02:28 You know, we're going to have, there's some urgent market elected.
  • 02:30 I mean, there's a lot going on.
  • 02:31 I think it's an opportunity to take advantage of it.
  • 02:33 I don't think rates are going very far.
  • 02:36 I think equities will continue to grind higher.
  • 02:38 I think the,
  • 02:38 I think,
  • 02:39 I think the dynamic around the technicals and fundamentals or equities are pretty darn good.
  • 02:43 But it's an environment where you get extreme moves on some of these election news, not just US that it's a
  • 02:48 pretty good opportunity to take advantage, maybe go on the way because markets, markets tend to overreact, particularly in quiet periods, they tend to overreact
  • 02:55 and you know, to tactically fade some of that, you
  • 02:57 know, particularly when you're in front of those.
  • 02:59 The election news, I think is a
  • 03:01 is a pretty good opportunity.