Rieder’s call adds a heavyweight voice to the argument that higher yields are now drawing large investors back into fixed income.
That could help absorb the wave of AI-related corporate issuance that has weighed on credit markets
Support from the world’s largest asset manager may help stabilise spreads on hyperscaler bonds in particular, while debt tied to data centres without hyperscaler backing looks set to stay under pressure. For Treasuries, his warning that rates could still rise, along with his concern over government debt costs and crowding out from AI supply, suggests the bond buying case rests on income rather than price gains. With markets pricing a December Fed hike at close to 90%, the main near-term risk to the trade remains an inflation upside surprise.
Higher oil prices remain a key driver of that risk. – BlackRock’s bond chief says investors are being paid crisis-level yields without a crisis, and the hyperscalers flooding the market with debt are among the borrowers he most wants to lend to. Summary: Rick Rieder, BlackRock’s chief investment officer for global fixed income, sees a historic opportunity in high-quality bonds, he told CNBC He says investors could build a diversified portfolio yielding above 7%, with under three years of duration and an average A- credit rating Investment-grade corporates are his top pick, including bonds from AI hyperscalers such as Alphabet, Amazon, Meta and Oracle, which have issued around $228 billion in debt this year His iShares Flexible Income Active ETF has lifted its investment-grade allocation to about 14% from 8.5% in July He remains cautious on data centre debt without hyperscaler backing and on lower-rated credit more broadly He expects the Fed to hike in December but disagrees with the move, arguing that higher rates hurt housing and consumer credit while barely touching AI spending BlackRock’s Rick Rieder says investors have a historic opportunity to secure attractive yields in high-quality bonds