BlackRock Defies Wall Street Herd, Demands Fed Rate Cuts Now—Here’s Why It Matters
BlackRock just threw a grenade into the consensus. While Wall Street licks its chops over sustained high rates, the $10T asset manager screams for cuts. Who's right?
---
The Fed's high-wire act
Powell's been playing inflation whack-a-mole for 18 months. Now BlackRock's research arm says the game's over—time to pivot before markets break. Their models show recession risks outweigh inflation by Q4.
---
Market implications
Rate cuts would send crypto vertical. Bitcoin's already pricing this in—up 27% since June lows. Traders are front-running the Fed like it's 2021 all over again. (Some things never change—bankers will still take 2-and-20 for being wrong.)
---
The bottom line
When the world's largest asset manager zig-zags against the Street, smart money pays attention. The real question: Is this foresight...or desperation to juice their underperforming alts book?
BlackRock bets on AI, crypto, and stablecoins while waiting for Fed to act
Rieder said the only long-term path out of the U.S. debt problem is to grow faster than the debt itself. “There’s only one way to de-lever the economy. You’ve got to outrun the debt. You got to outgrow it,” he said. He said a combination of GDP growth between 4.5% to 5% and a drop in interest rates to 3% could help, though it would take time.
On the tech side, Rieder leaned heavily into artificial intelligence as a future growth engine. “People underestimate how dramatic this is gonna be,” he said. He tied AI, robotics, cloud, software, energy, and cooling into one broad theme of accelerated productivity.
“Our world a year or two hence is gonna see things that nobody’s ever seen before,” he said. AI-driven automation will create lower-cost services, improve business efficiency, and change how companies operate entirely.
“It doesn’t have to be necessarily the Mag 7,” Rieder added. He believes companies that use data effectively, whether they’re retailers, media platforms, or tech firms, are best positioned. “The companies that utilize data to expand their mode… how they advertise, how they run their business efficiently using software,” are the real winners.
Rieder still favors large-cap growth stocks and tech. “I still believe in growth, in technology and equities,” he said. He also supports balancing portfolios with small amounts of Gold or crypto.
On crypto, Rieder made it clear he owns some personally. He didn’t go into detail on amounts, but said it’s held in “moderate size.”
More importantly, he called stablecoins a key part of the future financial system. “Stablecoin, I actually think will be quite helpful,” he said. “It will soak up some of the Treasuries… not a tremendous amount, but some.” He also said stablecoins will help with global dollar use and with tokenized payments and investments.
Rieder ended by calling the global crypto adoption rate “extraordinary.” Despite volatility, he sees it as a growing part of the economy that investors will have to deal with, like it or not.
Your crypto news deserves attention - KEY Difference Wire puts you on 250+ top sites
