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Episode 113: Rick Rieder

I’m doing okay. Can I turn the volume up a little bit?

Good morning. I'm Rick Rieder, chief investment officer of global fixed income at BlackRock. It’s the week of July 27th. Here are three things you need to know, and one you don’t.

First up…

The Federal Reserve is gonna meet this week. We have a new Fed chair, and we’re learning more and more about how he’s thinking about the world. There’s been one very critical thing that chair Warsh has said: He’s focused on the left side of the decimal place versus the right. That is a big change. The left side means it’s the big number. They’re focused on, is it 2%? Is it 3%? Less of this trivial focus on hundredths of a basis points of inflation. And, I think that reduces volatility, because he’s looking at the big picture. How he frames that in this meeting is going to be fascinating.

Next Up…

This week, we’ve got 34% of the S&P reporting. And, I think one of the things is that when you come out the other side and you think about, okay when I look at my equity holdings I need growth. Who’s still got durable persistent growth? Where should I continue to ride it, and then take a step back and say, where’s the growth? Where are my multiples now, given some volatility, and then where do I wanna position the portfolio?

Which brings us to…

There’s a real nuance to today’s inflation. Core goods, goods inflation, is non-existent. Then you look at education, healthcare — sticky non-interest rate sensitive, not cyclical. Big thing with this inflation, you’re seeing it play out very clearly: The mortgage rate that’s moved up. To make mortgage payments is significantly more expensive than rental. So what happens is people are renting, rent prices stay firm. It's why you have inflation that is higher than it should be. It's very different in the past. If you actually bring down the interest rate, you’ll create more housing inventory that's out there, and that will bring inflation down.

And the one thing you don’t need to know…

I’m the biggest fan in the world of the Baltimore Orioles. I took my grandson. So far he’s 2-0. So I'm taking him to every game, because he seems to be the lucky charm we’ve been waiting for. My hot take? We’re gonna make the playoffs this year, and then who knows what can happen from there.

To get more three plus one and stay up on everything you need to know… And some things you don't, make sure to follow us on LinkedIn and YouTube. We'll see you next week.

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