Rick Rieder, Blackrock’s most important investment manager for Global Fixed Income, said earlier this week that the current background represents the “best investment environment ever” that cites unusually favorable dynamics in both equity and bond markets.
When talking about CNBC, Rieder described “extraordinary” technical conditions in shares, with trillion of dollars still parked in money market funds and robust companies that are shrinking. While valuations for the market’s largest technology names remain increased, he noted that earnings growth outside Tesla helped justify the multiples. “Mag-7 years for the year Growth is like 54%,” he said, adding that the pace makes the sector difficult to ignore.
On the bond side, Rieder highlighted the appeal to income.
Investors can still build portfolios that give between 6.5% and 7%, a level he described as very attractive in a world where inflation has driven less than 3% on the core base. He argued that although the Federal Reserve has room to reduce the rates – potentially start as soon as September – the current dividends already offer investors solid returns.
‘Crazy Low’ volatility
Rieder also emphasized today’s unusually muted volatility. He described trade on equity volatility or “Vol” at levels near 9.5 to 10, which he called “Crazy Low.” Low volatility, he said, covering down towards downward risk relatively cheaply, giving investors what he called an “escape hatch” if the conditions are acidic. “You don’t actually need to take down risk,” Rieder said.
Rieder still warned that complacency is his biggest concern. With insurance in markets so cheap, he sees signs that investors can underestimate risks, especially in credit postings and other corners of fixed income.
Fed’s interest
On monetary policy, Rieder argued that Fed’s interest rates have done little to suppress inflation, given that large companies are less dependent on borrowing for financing investments.
The real feature, he said, has been on housing activity and households with lower income that depend more on credit. Keeping the rates too high, he warned, and risks imposing the government and households without meaningful disinflation gains.
He believes that the central bank could lower the fund’s rate by up to 100 basic points in the coming year, a step that he sees as unlikely to revive inflation, provided low structural volatility and increasing productivity from progress in data, hyperscale computing and even space -related technologies.
“There is something spectacular about productivity,” he said, calling it a one-time-in-a-generation dynamics.
For cryptoinvestors, Rieder’s comments amplify a wider narrative: an environment of falling rates, abundant liquidity and low volatility could support renewed appetite for risk assets beyond shares. If his calls turn out to be correct, the same technical headwinds that drive shares higher can be wasted for digital assets that thrive on excess cash and investor risk taking.
