Rick Rieder, BlackRock’s chief investment officer of global fixed income, said earlier this week the current backdrop represents the “best investment environment ever,” citing unusually favorable dynamics in both equity and bond markets.
Speaking on CNBC, Rieder described “extraordinary” technical conditions in equities, with trillions of dollars still parked in money market funds and robust corporate buybacks shrinking available supply. While valuations for the market’s largest technology names remain elevated, he noted that earnings growth outside Tesla helped justify the multiples. “MAG-7 year-on-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 of income. Investors can still build portfolios yielding between 6.5% and 7%, a level he described as highly attractive in a world where inflation has drifted below 3% on a core basis. He argued that while the Federal Reserve has room to cut rates — potentially starting as soon as September — current yields already offer investors solid returns.
Rieder also emphasized today’s unusually subdued volatility. He described trading equity volatility, or “vol,” at levels near 9.5 to 10, which he called “crazy low.” Low volatility, he said, makes hedging against downside risk relatively cheap, giving investors what he called an “escape hatch” if conditions sour. “You don’t actually have to take the downside risk,” Rieder said.
Still, Rieder cautioned that complacency is his biggest concern. With insurance in markets so inexpensive, he sees signs investors may be underestimating risks, particularly in credit spreads and other corners of fixed income.
On monetary policy, Rieder argued the Fed’s rate hikes have done little to suppress inflation, given that large corporations rely less on borrowing to finance investment. The real drag, he said, has been on housing activity and lower-income households that depend more heavily on credit. Keeping rates too high, he warned, risks imposing excessive costs on the government and households without meaningful disinflation gains.
He believes the central bank could lower the funds rate by as much as 100 basis points over the coming year, a move he sees as unlikely to rekindle inflation given low structural volatility and rising productivity from advances in data, hyperscale computing and even space-related technologies. “There’s something spectacular happening around productivity,” he said, calling it a once-in-a-generation dynamic.
For crypto investors, Rieder’s comments reinforce a broader narrative: an environment with falling rates, ample liquidity and low volatility could support renewed appetite for risk assets beyond equities. If his call proves correct, the same technical tailwinds driving stocks higher could spill into digital assets that thrive on excess cash and investor risk-taking.
