BlackRock’s Rick Rieder: Don’t underestimate the resilience of the U.S. economy
BlackRock’s Rick Rieder: Don’t underestimate the resilience of the U.S. economy


BlackRock’s Rick Rieder stated this week that whereas the economy is slowing, he believes it could rebound.

“I name the U.S. economy, the polyurethane economy as a result of it flexes, adjusts like a Tempur-Pedic mattress. It can take some fairly important photographs, and it simply rebounds,” Rieder advised CNBC’s “ETF Edge” on Monday.

“We assume actual GDP will end at 2½%. Next 12 months, we expect it is going to be a p.c and a half optimistic so moderating slower,” the agency’s Global Fixed Income chief funding officer defined. “But I believe individuals underestimate” the U.S. economy.

He added that he “does not perceive the idea of a ‘touchdown'” and believes cycles are one thing we noticed 20 years in the past.

Rieder, who additionally oversees BlackRock’s Global Allocation staff, thinks that individuals are nonetheless going to purchase equities regardless of the present demand for Treasury bonds.

“Are we going to see 25% returns in equities? I do not assume so, however I believe equities will do their job. I believe the a number of will keep comparatively unchanged,” he stated.

He famous that his thesis will maintain so long as charges transfer decrease in the second half of 2024.

“If you assume the yield curve can normalize, you can create an honest tail wind for the fairness market,” Rieder added.

Morningstar’s 2023 Outstanding Portfolio Manager winner prefers the U.S. to Europe for funding alternative as he thinks Europe is “slowing sooner.”

“If you are taking the multiples of the Magnificent Seven, yow will discover rather a lot of shares buying and selling at three, 4 or 5 occasions money circulate,” Rieder stated. “I’ve discovered in my life if you should purchase steady companies at three, 4 or 5 occasions money circulate that is fairly darn enticing.”

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