BlackRock CIO: "Fed May Cut Interest Rates Twice This Year"

Rick Rieder, Chief Investment Officer (CIO) of BlackRock, the world's largest asset management firm, predicted on the 22nd (local time) that the Federal Reserve (Fed) will implement two interest rate cuts within this year.

In an interview with Bloomberg TV released on the same day, Rieder said, "It is becoming increasingly difficult to do so, but I still think it is possible." He anticipated that as inflation eases in the coming months, the Fed will proceed with two rate cuts this year, which would also bring relief to investors who have recently experienced painful rises in Treasury yields.

Recently, economic indicators including the US Consumer Price Index (CPI) have exceeded expectations, pushing Treasury yields to their highest levels this year. Expectations for rate cuts in the interest rate futures market have also been pushed back. According to the Chicago Mercantile Exchange (CME) FedWatch, the interest rate futures market currently reflects an over 83.0% probability that the Fed will keep rates unchanged at the June Federal Open Market Committee (FOMC) meeting. Just a month ago, this probability was only 24%.

Rieder explained that BlackRock is reducing its own interest rate exposure and placing a greater emphasis on investments with shorter maturities.

Meanwhile, this week, the core Personal Consumption Expenditures (PCE) price index, an inflation indicator closely watched by the Fed, is scheduled to be released. If the PCE price index also exceeds market expectations, the market's expectations for rate cuts are likely to be further delayed. Currently, Wall Street estimates that the March PCE price index will rise 0.3% month-over-month and 2.6% year-over-year. The core PCE price index is expected to increase 0.3% month-over-month and 2.7% year-over-year.