Rick Rieder

Near‑term inflation expectations have risen on supply shocks tied to energy and geopolitics, which tend to be episodic and act more like a tax on consumers. By contrast, longer‑term inflation expectations tied to wages, services, and consumption remain well anchored, suggesting demand‑driven inflation continues to ease. That distinction helps explain the Fed’s patience without taking rate cuts off the table this year.

CIO Chart of the Week: While equity indices are holding in reasonably well amidst market stress, the more important market story is under the hood. There is meaningful dispersion across constituents beneath the surface, reflecting a market that is quickly separating durable growers from more challenged business models. In periods of uncertainty, correctly determining the winners and losers matters more than ever, and that’s a key setup we’re watching into 2026.

CIO Chart of the Week: Last week’s payrolls headline missed the bigger story. While February payrolls fell 92k, unemployment moved up to 4.4%, when you strip out health care, job growth over the last few months has turned meaningfully negative. This looks less like a collapse and more like a composition shift in the labor market. This mix of softer hiring, solid wage growth, which is running at about 4% YoY, and a productivity revolution, is exactly what makes the policy outlook more complicated from here.

If we assume the average person has a 45-year-long career, they would now be spending 21 years or 47% of their working years waiting to buy that first home! We continue to believe that lower mortgage rates are key to easing some of these affordability pressures and to supporting a more balanced housing market.

CIO Charts of the Week: Housing affordability continues to be very strained, particularly for the young and lower-income cohorts who are disproportionately being shut out of the housing market as first-time home buyers. Today median age of a first-time homebuyers is 40 years old, up from 33 years old in 2019!

Strong growth with higher productivity, easing inflation, and a softer labor backdrop can be a constructive mix for both equities and fixed income in 2026. Productivity is the anchor. It supports cash flow generation even as parts of the economy cool. The nuance is that markets may not move in unison, with dispersion creating more opportunity for selective positioning. Read the full piece here: blackrock.com/us/financial-p…

CIO Chart of the Week: A reminder amid all the daily noise that the US 10Y has spent more than two years oscillating around a remarkably stable center. While headlines jump, markets react, and every data point feels pivotal, since touching 4.0% in Oct ’22, the US 10Y has averaged 4.13% with a median of 4.17%. Noise moves fast, but fundamentals move slower.

As a result of these factors, we think the Fed is likely to become increasingly concerned about genuine labor market weakness and will respond with modest reductions in the policy interest rate. However, given the noisiness of recent data, including this report, the Fed will probably choose to wait a meeting, or so, to being cutting rates again. 2026 is likely to bring much greater dispersion across monetary policy paths, economic growth trends, and credit markets. In this environment, relying on simple market beta is no longer sufficient, and careful, targeted investment selection becomes essential.

Similarly, growth remained solid where real GDP averaged >4% in 2H ’25 even as job growth turned negative. That’s partly because 2025 appears to be the onset of a substantially higher productivity regime powered by the acceleration of AI, which we expect to continue into 2026 and beyond. We are likely observing the very beginning of its impact on labor markets today.

2026 has opened with a CPI print that seems to be more noise than narrative: Core +0.24% MoM (2.64% YoY) and Headline +0.31% MoM (2.68% YoY). While some positive shutdown payback is in the mix, context matters. Last year brought the profound shock of the highest tariffs in decades and a record‑long government shutdown.

For most of the last few years, markets rewarded almost any risk. That phase is over. In my latest commentary, we look at why inflation is fading as the main story in 2026, how AI is reshaping the landscape for growth and labor, and why we think the odds now favor investors rather than gamblers: blackrock.com/us/financial-p…

This is an environment to clip coupon and concentrate your upside. This month we outline how productivity dynamics are shaping equity returns, while measured duration and high starting yields keep portfolios invested through the noise. blackrock.com/us/financial-p…

CIO Chart of the Week: AI-related spending isn’t just a tech story—it’s an economic engine. Since 2023, AI investment has consistently outpaced non-AI, driving the majority of business investment contribution to GDP. Even during the period of volatility and uncertainty, it remains pretty clear that AI will be a growth anchor, and expected payoffs could be quite large.

What can Rafa Nadal teach us about investing? Nadal only won 54% of points in his career, yet he's a 22-time Grand Slam champion. Success came from winning the points that mattered most. The same is true in markets. The points that matter today include: moderating inflation, resilient (if uneven) growth, and historically attractive yields. Read more in our latest insight: blackrock.com/us/financial-p…

The current high-rate environment continues to disproportionately burden lower-income earners while simultaneously paralyzing the housing market. We can see this stress in recent spending data, as low-income consumption is negative YoY, compared to high income consumption running at nearly +5% YoY. Further rate cuts by the Federal Reserve are not just warranted—they are essential to restoring balance and broad-based economic resilience.

However, we've pointed out that the aggregate consumption figures offer limited insight into the financial reality of most American households. A closer look reveals that the top 10% of earners spend more than the bottom 40% combined. So, while we continue to expect that the aggregate US growth trajectory will remain strong, buoyed by high-end consumers and investment, we also believe that large parts of the population and large sectors in the economy are struggling due to restrictive rates today.

Yesterday's GDP revision reaffirms our view that the aggregate economy remains robust, as an impressive upward revision in consumption showed that Q2 Real GDP expanded at the most rapid pace in nearly two years. Particularly, private domestic final purchases (PDFP), which chair Powell stated was a “narrower but better signal for the future” was revised up by almost a full percent.

CIO Chart of the Week: As markets prepare for today’s highly anticipated Fed meeting, the current high-rate environment continues to weigh heavily on consumers—most notably in housing. Today, would-be home buyers face housing affordability at all-time lows where the qualifying income needed for first-time home buyers has more than doubled in 5 years! As we have said previously, this dynamic underscores how elevated rates disproportionately affect lower-income households, many of whom have been sidelined from homeownership in the post-COVID era.