BlackRock bond chief Rieder says U.S. economy in 'much better shape’ than doomsayers portray

NEW YORK – When the enslaved main of the world's biggest asset manager looks astatine the U.S. close now, helium sees a batch to like.

A operation of resilient government, firm and user spending, improving homebuilder data, $1.5 trillion successful excess savings and debased unemployment archer BlackRock's Rick Rieder that the American system is faring amended than galore expected.

"I deliberation the U.S. economy's successful overmuch amended signifier than radical springiness credit" for, Rieder said Tuesday at an event astatine BlackRock's New York headquarters.

"There's this thesis that you volition person a melodramatic slowdown," helium said. "When you interruption down the numbers, it's conscionable not apparent." 

Talk of an impending recession has been gathering arsenic the interaction of the Federal Reserve's involvement complaint increases ripple done the economy. The illness of 3 midsized banks this twelvemonth person stoked concerns that lenders volition rein successful entree to credit, further slowing down the economy. Still, employment figures person confounded expectations, astir recently for April, erstwhile nonfarm payrolls jumped by 253,000.

"When radical speech about, 'We're going to a recession oregon a heavy recession,' it's beauteous antithetic [or] astir intolerable erstwhile you person an unemployment complaint of 3.4%," Rieder said.

Rieder, a three-decade seasoned of the markets who oversees $2.4 trillion successful assets, said helium expects the Fed to pause complaint increases astatine its adjacent meeting. While the cardinal slope could rise rates erstwhile much aft that, helium said that its rate-hiking run is mostly done.

That expectation, combined with slowing inflation, gives investors a bully backdrop, adjacent if helium does expect the system to dilatory aboriginal this year, Rieder said.

The biggest menace to Rieder's thesis is simply a imaginable U.S. default connected its sovereign debt, which could usher successful panic and beryllium "potentially catastrophic" for the economy, according to experts including JPMorgan Chase CEO Jamie Dimon. Treasury Secretary Janet Yellen has said that the U.S. could suffer the quality to wage its bills arsenic soon arsenic June 1.

Rieder puts a "very precocious probability" of the Biden medication striking a woody with Republican lawmakers, helium said.

"I've ne'er seen truthful overmuch wealth sitting successful cash, and a batch of it" waiting for a debt ceiling resolution earlier being deployed, helium said.