BlackRock CIO Dumps Stocks for High-Grade Bonds. Here’s Why

BlackRock’s Rick Rieder is cutting stocks. He says high-grade bonds paying 7% to 8% now beat the 10% to 12% he expects from equities. Rieder is chief investment officer of global fixed income at BlackRock and oversees about $2.4 trillion.

He spoke on Yahoo Finance’s Sozzi Unleashed about the 10-year Treasury yield above 5%. Why the US Treasury Yield Matters The 10-year yield is the interest rate the US government pays to borrow for a decade. It shapes mortgage rates, company loans, and stock prices.

This month it rose above 5% for the first time since 2007. TradingView data shows it at 5.167% on Sept. 26, with the 30-year yield at 5.49%. 10-Year US Treasury Yields.

Source: TradingView The Federal Reserve raised its benchmark rate to 3.75%–4% on September 16, its first hike in more than three years. Rieder called the moment “not a crisis, but an eye-opener.” Rieder graded stocks a B-minus, lower than he had for a long time.