Rick Rieder, BlackRock’s chief investment officer of global fixed income, is trimming equity exposure in favor of high-grade bonds. He said bonds can offer a safe 7% to 8% return, which he finds more compelling than stocks.
Rieder forecasts stocks will return 10% to 12% over the next year. The 10-year Treasury yield has climbed above 5%.
Rieder downgraded his grade for equities to B-minus from his previous stance. He cited higher real interest rates and the possibility that rapid growth in the artificial intelligence sector could slow.