BlackRock's Rieder Sees 10-Year Yield Dropping to 4%

Rick Rieder discusses the disconnect between equity and bond markets, arguing that equities have more upside due to technicals, while the 10-year Treasury yield will decline to 4% as mortgage rates need to come down. He also comments on corporate credit attractiveness, Fed policy, and the impact of AI on productivity and labor. - Rieder sees equities having more upside than bonds due to limited equity supply and strong cash flows. - He expects the 10-year Treasury yield to fall to 4% over the next six months to a year. - Corporate credit yields are attractive and default risk is low given strong nominal GDP growth. - He believes the Fed can cut rates because rate-sensitive sectors are in recession. - AI-driven productivity revolution will cause labor disruption for a couple of years. - Rieder supports less forward guidance from the Fed for healthier market adjustment. - He currently stays in the belly of the yield curve but will go long duration when mortgage rate catalysts emerge.