BlackRock's Rieder on Jobs Report, Fed Rates and Bonds
Speakers
Rick Rieder
— CIO of Global Fixed Income at BlackRock
Summary
Rick Rieder, BlackRock's fixed income CIO, sees a 'productivity revolution' driving a solid US economy with strong earnings but muted hiring. He argues Fed hikes are ineffective for services inflation and fiscal policy is needed. In fixed income, he favors high-quality bonds with high coupons, adding European and EM debt, avoiding US IG credit on supply concerns, and favoring securitized assets like CMBS and ABS.
- July jobs report 'unremarkable' and a productivity revolution is reducing the need for hiring.
- Fed unlikely to hike; cuts possible later if economy slows, but the committee remains hawkish.
- Recommends high-quality bonds (A-minus average) yielding high sixes without stretching credit quality.
- Adding to European fixed income and finds emerging markets debt interesting if the dollar stays stable.
- Avoids US investment grade credit due to heavy supply from data center and hyperscaler issuers.
- Sees securitized assets (commercial real estate and ABS) in pretty good shape.
- Not adding interest rate exposure, prefers clipping coupons in a short-duration, boring bond portfolio.
- Demographic demand from insurers and pensions is absorbing the historic supply of debt.
Ideas
Add European fixed income.
After the backup in rates, investors can hit yield targets without going down in credit quality or stretching for illiquidity. European fixed income is attractive in this environment and BlackRock has been adding to it.
Emerging markets debt attractive.
Emerging market debt offers good opportunities, especially if the dollar does not move aggressively. It fits the strategy of achieving higher yields without excessive risk.
Avoid US investment grade credit.
Investment grade credit, particularly from data center and hyperscaler borrowers, is unattractive due to the enormous supply expected, which will keep spreads under pressure.
Long securitized assets (CMBS, ABS).
The securitization market is in good shape, with both commercial real estate securitizations and asset-backed securities offering attractive value and solid fundamentals.
Avoid long-duration bond exposure.
With heavy supply of government and credit bonds pushing up real rates, and the portfolio able to hit high yields without stretching, there is no rush to add interest rate exposure. Instead, the focus is on clipping coupons with short-duration instruments.
Up Next
This Bloomberg Markets video, published August 07, 2026, features Rick Rieder discussing BNDX, EMB, LQD, CMBS, TLT. 5 trade ideas extracted by AI with direction and confidence scoring.