Odaily Planet News: Rick Rieder, BlackRock's Chief Investment Officer for Global Fixed Income, is a potential successor to Federal Reserve Chair Jerome Powell. It is reported that he will meet with U.S. President Donald Trump for an interview on Thursday. At this time, Rieder reiterated his support for lowering the U.S. benchmark interest rate to 3%, a level that would mark the lowest in over three years.
In a CNBC interview aired on Monday, Riddle stated that for months he has repeatedly expressed his view that interest rates should be cut to 3%. He reiterated his support for this move on Monday, which would reduce borrowing costs by at least 50 basis points (0.5 percentage points) from current levels.
After the Federal Reserve officials cut interest rates by 25 basis points in December last year, the current target range for the federal funds rate is 3.5% to 3.75%.
"I believe the Federal Reserve does have some policy maneuvering room," Riddle said. "My stance has been very clear for so many months. The Fed must cut interest rates, and I think it doesn't need to cut by much, ultimately reaching 3%—a level closer to the neutral rate." The neutral rate is a theoretical level of borrowing costs that is neither stimulative nor restrictive, and can sustain stable operation of the U.S. economy.