Speaking to CNBCRieder described the “extraordinary” technical conditions in equality -equivalent, with trillion dollars still parked in money market funds and stable corporate purchase of the available supply. While the values for the largest market technology names remained elevated, he noted that income growth outside Tesla has helped justify multiples. “7 year-on-year growth is like 54%,” he said, adding that the speed makes it difficult to ignore the sector.
On the bond side, Rieder emphasized the appeal of income.
Investors can still develop portfolios that yield between 6.5% and 7%, a level he describes as extremely appealing -in a world where inflation drifts below 3% on a basic basis. He argued that while the Federal Reserve had a room to cute the rates – potentially starting in September – the current yields offer investors a solid return.
‘Crazy Low’ Volatility
Rieder also emphasized the unusual covered volatility. He described the volatility of equity equity, or “vol,” at levels near 9.5 to 10, which he called “crazy.” Low volatility, he said, produces a downside risk that is relatively inexpensive, giving investors what he calls “escape” if the conditions are sour. “You don’t really have to take the downside risk,” Rieder said.
However, Rieder warned that pleasure was his greatest concern. In insurance in inexpensive markets, he sees signs that investors can enderest risks, especially with the spread of credit and other corners of the fixed income.
Fed interest rate
In the financial policy, Rieder argues that Fed rate increases have been less made to suppress inflation, as large corporations do not rely on borrowing financial investment.
The real drag, he said, is in the housing activity and low-income households that depend more on credit. Maintaining high rates, he warned, the dangers of imposing excessive costs to government and households without significant disinflation.
He believes that the central bank can reduce the fund rate of nearly 100 basis of points in the coming year, a step he sees that it is unlikely to recover inflation provided by low structural volatility and increased productivity from data advances, hyperscale computing and even space -related technologies.
“There is something amazing happening around productivity,” he said, calling it once-to-a-the-the-jealousy.
For crypto investors, Rieder’s comments adopt a broader narrative: an atmosphere with falling rates, lots of liquidity, and low volatility can support the revised appetite for the risk of risk beyond equality. If his call proves correctly, both technical tails driving higher can rotate digital assets that develop in excess cash and investment risk.
