BlackRock’s Rieder expecting a hawkish FED, investing on bonds


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BlackRock’s Rieder expecting a hawkish FED, investing on bonds

BlackRock Inc.’s Rick Rieder has purchased longer-term bonds, as he thinks that the softened inflation would force the FED to reverse their decision regarding rate hike and a rate hike is imminent on December 19th, in the year-ending meeting of FED.

Earlier in this week, Rick Rieder had told to the media that he would be purchasing the longer-term bonds, as a softening of inflation would provoke the FED to hike the interest rate again for 2019. Rick Rieder, the chief investment officer of global fixed income, has also been quoted as saying that the inflation could be declining from the recent levels.

On Wednesday, December 5th, Rieder said, “People keep waiting for the bogeyman coming in terms of inflation, and they’re going to have to wait a long time, why not pause?" Over the past three weeks, Rieder has been purchasing the longer-term bonds, however, earlier this week, he had been found selling long bonds, citing that there was uncertainty around FED policy.

In fact, right now, he is saying that the picture is clear and a rate hike is imminent. Rieder’s decision seemed to clearly contraindicate both Trump administration’s thought regarding interest rate and the recent comment of FED chairman Jerome Powell.

On November 28th, Jerome Powel told that the policy rates are “just below” the neutral level, echoing Trump’s voice, who has recently been criticizing FED’s rate hike policy.