BlackRock's Rick Rieder said it's not clear whether there are additional shoes to drop in the banking system, but he does see some tightening of lending.
BlackRock's Rick Rieder said it's not clear whether there are any additional shoes to drop in the banking system, but he does see some tightening of lending and that could hurt the economy. "When you move the funds rate up as much as it has, and the banks are competing deposit-wise with Treasury bills at very elevated rates, and have some sticky assets that don't adjust that quickly, it's a difficult stress on the system," said Rieder, in a phone interview.
I think spreads got too tight and I think the market was a little overzealous in all assets," Rieder said. "Some of these high-quality fixed income assets went through a period where it wasn't very interesting, and now there's some value again, particularly the front end of the investment grade market." He expects the range of the benchmark 10-year Treasury yield will now also be lower, between 3.25% and 4%.
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