{"id":12858,"date":"2023-05-23T21:35:00","date_gmt":"2023-05-24T01:35:00","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/blackrocks-rick-rieder-sees-epic-cash-on-sidelines-as-he-takes-lead-role-on-new-etf\/"},"modified":"2023-05-23T21:35:01","modified_gmt":"2023-05-24T01:35:01","slug":"blackrocks-rick-rieder-sees-epic-cash-on-sidelines-as-he-takes-lead-role-on-new-etf","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=12858","title":{"rendered":"BlackRock\u2019s Rick Rieder sees \u2018epic\u2019 cash on sidelines as he takes lead role on new ETF"},"content":{"rendered":"
\n

There\u2019s an \u201cepic\u201d amount of cash on the sidelines as investors assess a slowing U.S. economy and the debt-ceiling debate in Washington, according to Rick Rieder, chief investment officer of global fixed income at BlackRock.<\/p>\n

\u201cI\u2019ve never seen so much money sitting in cash,\u201d Rieder said Tuesday during a BlackRock media briefing at its New York office on markets and the firm\u2019s new, actively managed exchange-traded funds.<\/p>\n

\n

Related<\/strong>: A debt-ceiling deal will spark a new worry: Who will buy the deluge of Treasury bills?<\/p>\n

Rieder is the lead portfolio manager of the new BlackRock Flexible Income ETF
\n BINC,
\n +0.04%<\/bg-quote>,<\/span>
\n the first active ETF managed by Rieder, according to a BlackRock statement on Tuesday.<\/p>\n

Rieder said during the briefing that he sees a \u201cvery high probability\u201d that a debt-ceiling deal gets done ahead of a looming\u00a0deadline for Congress to lift it or leave the U.S. facing the possibility of soon running out of cash to pay all its bills. Market disruption from the U.S. defaulting on its debt would be \u201csignificant,\u201d as Treasury bills are used as \u201ccollateral\u201d globally, he said.<\/p>\n

Read:<\/strong> Debt-ceiling angst sends Treasury bill yields toward 6%<\/p>\n

As portfolio manager of the BlackRock Flexible Income ETF, Rieder said he\u2019s targeting a yield of \u201cjust under 7%.\u201d\u00a0The rise in interest rates over the past year has made it possible to target such a yield in debt markets with less risk-taking than would have been needed at the end of 2021, according to Rieder.\u00a0<\/p>\n

He plans to invest opportunistically, including in areas harder for many investors to reach in \u201ccomplex\u201d fixed-income markets, such as exposures to mortgages and collateralized loan obligations.\u00a0<\/p>\n

In his view, the U.S. economy is in \u201cbetter shape\u201d than many people give it credit for at this stage in the cycle. While growth is slowing, Rieder said he doesn\u2019t see a \u201cdeep recession\u201d impending, citing a low unemployment rate, wage growth and excess savings in the economy.\u00a0<\/p>\n

He anticipates the Federal Reserve may pause its rate hikes at its next policy meeting, as inflation has been easing even if it remains \u201csticky\u201d in core services. The Fed has aggressively raised rates over the past year in a bid to bring down high inflation. \u201cI think we\u2019re reaching the end of the process,\u201d said Rieder.\u00a0<\/p>\n

Meanwhile, BlackRock has expanded its active ETF lineup in equities, as well, announcing on Tuesday that Tony DeSpirito is the lead portfolio manager for its new BlackRock Large Cap Value ETF
\n BLCV,
\n -0.99%<\/bg-quote>.<\/span>
\n \u00a0 <\/p>\n

Active ETFs are one of the fastest-growing areas of the exchange-traded fund market, said Rachel Aguirre, head of U.S. iShares Product at BlackRock, at the media briefing Tuesday. It\u2019s still \u201cearly innings,\u201d she said.<\/p>\n

The U.S. stock market closed lower Tuesday amid debt-ceiling worries. The Dow Jones Industrial Average
\n DJIA,
\n -0.69%<\/bg-quote>
\n fell 0.7%, while the S&P 500
\n SPX,
\n -1.12%<\/bg-quote>
\n dropped 1.1% and the technology-heavy Nasdaq Composite
\n COMP,
\n -1.26%<\/bg-quote>
\n slumped 1.3%, according to FactSet data.<\/p>\n

In the bond market, the yield on the 10-year Treasury note
\n TMUBMUSD10Y,
\n 3.695%<\/bg-quote>
\n fell 2.1 two basis points to 3.696% on Tuesday, while 2-year Treasury yields
\n TMUBMUSD02Y,
\n 4.266%<\/bg-quote>
\n rose 1.5 basis points to 4.333%, according to Dow Jones Market Data.<\/p>\n

Treasury Secretary Janet Yellen expects the so-called \u201cX-date,\u201d when the U.S. risks breaching its debt ceiling and running out of cash, to arrive as soon as June 1.\u00a0<\/p>\n

Read:<\/strong> \u2018Doomsday machine\u2019: Here\u2019s what could happen if the debt ceiling is breached<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

There\u2019s an \u201cepic\u201d amount of cash on the sidelines as investors assess a slowing U.S. economy and the debt-ceiling debate in Washington, according to Rick Rieder, chief investment officer of global fixed income at BlackRock. \u201cI\u2019ve never seen so much money sitting in cash,\u201d Rieder said Tuesday during a BlackRock media briefing at its New […]<\/p>\n","protected":false},"author":1,"featured_media":12859,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-12858","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nBlackRock\u2019s Rick Rieder sees \u2018epic\u2019 cash on sidelines as he takes lead role on new ETF | iFintechWorld<\/title>\n<meta name=\"description\" content=\"There\u2019s an \u201cepic\u201d amount of cash on the 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