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BlackRock's Rieder Sees Fed Cutting Again in December

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Bloomberg Nov 7 19:41 · 18.1k Views

BlackRock CIO of Global Fixed Income expects the Federal Reserve to cut interest rates again in December. He also talks about what the Fed could do under the Trump administration.

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Transcript

  • 00:00 Rick, welcome to the program.
  • 00:01 You followed that news conference.
  • 00:02 Let's just start with your first take away.
  • 00:04 Rick, what's your big one?
  • 00:06 So the first one, like you say, there's some drama there
  • 00:09 and I thought that was interesting.
  • 00:10 Listen, I, I think
  • 00:12 I agree with the comments that they, they have to
  • 00:14 introduce some balance, I think in December.
  • 00:17 Listen, I think the take away is they still think rate is restrictive.
  • 00:20 I still think you got to get that funds rate down to 4:00-ish.
  • 00:25 I think that you got it.
  • 00:26 You're going to go in December.
  • 00:27 I think you got to get the, you know, you got to be really careful about the mortgage rate in this country as we can talk about.
  • 00:32 But I think they're going to go in December.
  • 00:33 I think he's got that, that that's part of the plan.
  • 00:35 But then as you get into next year,
  • 00:38 listen, I mean, you got it.
  • 00:39 You've got what could be a pretty significant policy change, set of policy changes.
  • 00:43 And I think the dots when you go back to the September forecast,
  • 00:47 I think you got to, you know, really think about that and evaluate that.
  • 00:50 I think that's going to be the, one of the most fascinating things
  • 00:52 going forward is how do they adjust terminal rate from here?
  • 00:55 How do they adjust where
  • 00:57 they project growth to be when you're going to go through, it could be some pretty significant evolution from here.
  • 01:02 So Rick, as I go through the calendar over the Federal Reserve, there's two dates with some Asterix over the next six months or so.
  • 01:07 And those little stars in the corner of those dates mean
  • 01:10 you get some projections at those meetings.
  • 01:12 So the next one is December 18th.
  • 01:14 And then as we work forward into the following year, we're going to get a decision from the Federal Reserve in 2025 in the spring on March 19th.
  • 01:22 On March 19th, rig, we'll have a new president who may be already
  • 01:27 coming forwards with some policies and some big tariffs.
  • 01:31 Rig Do you think it's still too early on March 19th
  • 01:34 to expect this Federal Reserve to bake in some policy from DJT, the former president and President-elect Donald Trump?
  • 01:41 Can I can I also say that
  • 01:43 we'll wait and see.
  • 01:45 Listen, I think
  • 01:47 I think that,
  • 01:48 listen, I think you're going to have to evaluate that policy.
  • 01:51 I mean,
  • 01:52 we're going to get more data on tariffs.
  • 01:54 We're going to get more data on how we deal with spending deficits.
  • 01:58 Listen, I think there's some extremes that that get said in a, when you go through an election campaign like this, how aggressive will be on tariffs, How aggressive will be
  • 02:07 uncutting spending.
  • 02:08 And then I think you're going to start to see some clarity.
  • 02:11 You're going to see, by the way, you're
  • 02:12 going to see what a cabinet looks like.
  • 02:14 You're going to see who the people are.
  • 02:15 You're going to have a sense
  • 02:16 for those personalities
  • 02:18 and they are, you know, what their disposition is with regard to policy.
  • 02:21 So yes, I think in March
  • 02:23 then you're going to have,
  • 02:24 you're going to have to evaluate that and I have to evaluate what it means for the forward growth forecast.