The U.S. Federal Reserve should lower its federal funds rate by 50 basis points next week, according to Rick Rieder, senior managing director and chief investment officer of global fixed income at BlackRock. Speaking with CNBC host Scott Wapner at the Future Proof Festival in Huntington Beach, Calif. on Tuesday, Rieder, who also heads the firm’s fundamental fixed income business and global allocation team, said he’s not worried about inflation.
“The Fed’s mandate is not [2% inflation], it’s price stability,” he said. “Obviously we’re ticking up a little bit to [3% inflation]. It’s just not that concerning.” The U.S. rate of inflation hit 2.9% in August.
“To say to low-income people, ‘I know you’re getting hurt by higher goods prices. We’re going to charge you more for interest rates too. It’ll be good for you in the long run.’ I think that’s crazy,” Rieder said.
He cited jobs data issued by the U.S. Bureau of Labor Statistics earlier in the day to support the call. It revised nonfarm payrolls data for the year ended in March 2025 down by 911,000 jobs, relative to its original estimates. That put total jobs added during the year at roughly 880,000.
The unemployment rate among young and Black Americans “has surged,” he said. The rate among 16- to 24-year-olds was 10.5% in August; it was 7.5% among Black Americans. The overall unemployment rate came in at 4.3% in August.
“We have a hiring dynamic that’s challenged, and is clearly softening,” Rieder said.
Even high-tech leaders like Google and Microsoft have announced layoffs in recent weeks, despite the technology sector’s strong performance this year. Google announced voluntary exist and buyout programs to an undisclosed number of employees in its Search, Advertising and Research & Engineering divisions in June. Microsoft laid off roughly 9,000 employees — about 4% of its workforce — a month later.
Rieder also said the Fed should stop forecasting future rate moves. “They should kill the dots,” he said, referring to the chart that details the federal funds rate expectations of each member of the Federal Open Market Committee. “Get rid of the outlook. One of the things you have at the Fed is the art of surprise. If you’re trying to shock the system, get a 50 done. … Moving the overnight funds rate 25 basis points every six weeks doesn’t [amount to] a hill of beans.”
None of this is to suggest that Rieder has turned bearish. “I do believe it’s the greatest investment environment I’ve ever seen,” he said. “You can create a portfolio with over 6% yield with a duration under three years and volatility of 2.5%.”
Gold makes up 3% to 4% of his portfolio — he started acquiring it a couple of years back. Rieder noted that China, for example, is holding fewer U.S. Treasuries and more gold. “They’re buying gold. India is buying gold. Poland, which I couldn’t believe, is buying a load of gold.”
Bitcoin, on the other hand, will continue to climb but not as the kind of hedge that gold is. It’s too tightly correlated with the tech-heavy NASDAQ index he said.
Technology stocks still make sense, despite their inflated valuations, he said. “The free cash flow these companies are throwing off is unbelievable. … I still think tech is a winner.”
And while he’s worried about AI’s impact on employment rates, Rieder remains invested in AI and robotics.
“I think we’re going to tell our grandkids about this — one of the most extraordinary few periods where you had a changing industrialization. Certainly, in the U.S., but arguably the globe. … I think the world is going to be in a very, very different spot three years hence.”