BlackRock's bond chief Rick Rieder breaks down why he's not worried rising yields will hurt the stock market
BlackRock's Rick Riedertold CNBC he's not worried about stocks against the backdrop of rising yields.
- He anticipates a little uncertainty but said stocks will then "recalibrate."
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The recent rise in
As the 10-year Treasury yield rose to its highest point in over a year Thursday, the CIO of global fixed income explained that the rise in yields should be taken into historical perspective.
"We started from negative 1%. The history of real rates, on average the last 25 years, the average has been about 1.5% positive and usually, when you get this sort of economic growth, you're talking about
Economic data suggests that the US will see an "explosive growth rate," and
While this happens he anticipates there will be a "little bit of uncertainty" in the stock market and volatility may rise, but then stocks will "recalibrate."
"I'm not that worried about equities," Rieder said.
The bond chief added that there are some stocks with high-flying valuations that will likely pull back as yields move up. High-growth stocks like those in the technology sector are seen as particularly vulnerable to a move higher in yields. On Thursday the Nasdaq suffered over a 3.5% intraday decline.
Rieder mentioned that his team has been looking into specific areas of technology included AI and the semiconductor space, but they've also been adding outside the sector.
"We've added to financials. We like the cyclicals, we like the consumer space quite a bit. The adds have been bigger there than in pure technology," Rieder said.
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