BlackRock CIO Calls For Rate Cut Ahead Of FOMC Meeting

With the FOMC meeting only four days away, BlackRock CIO Rick Rieder has added his voice to the calls for lower interest rates. Rieder argued that a Fed rate cut will usher in lower house prices and reduce inflation rates as the screws tighten around Fed Chair Jerome Powell.

BlackRock CIO Pushes For Fed Rate Cut

BlackRock CIO Rick Rieder is the latest in a long line of finance executives and policymakers to advocate for a Fed rate cut. The executive disclosed his position in a Bloomberg interview, urging to US Federal Reserve to slash interest rates, citing a slew of economic benefits.

Right off the bat, Rieder noted that borrowers are adversely affected by the current interest rate, with refinancing being a less attractive option. For the BlackRock executive, the housing market bears the brunt of the fallout from the Fed’s refusal to cut interest rates.

“If we get the rate down, you actually can bring home prices down, build more houses, and reduce inflation,” said Rieder.

Despite impressive economic indices in the US, Rieder said room remains for a Fed rate cut. Following the release of strong US job data in June, traders began exiting their bets for interest rate cuts in July.

While the Federal Reserve continues to cite inflationary concerns for its hawkish policy, the BlackRock executive noted that a rate cut to 3.25% is still above current inflation levels.

Pressure Piles On Jerome Powell Ahead Of FOMC Meeting

Fed Chair Jerome Powell is facing increasing political and economic pressure to announce interest rate cuts. US President Donald Trump is the loudest critic of the FED Chair, famously urging Powell to cut rates during an official visit to the Federal Reserve.

The US President has previously pointed to steep economic losses stemming from Powell’s refusal to slash interest rates. Federal Reserve Governor Christopher Waller and San Francisco Federal Reserve President Mary Daly have hinted at incoming rate cuts in 2025, stoking optimism for traders.

However, the CME FedWatch tool reveals grim figures for optimism of a Fed rate cut after July’s FOMC meeting. Odds for the Federal Reserve to keep interest rates steady between 425-450 bps sit at a staggering 95.9% while a cut to 400-425 bps is pegged at 4.1%.

Amid the heightened calls for rate cuts, Powell could face criminal investigation over allegations of untrue statements in his Senate testimony. Early in the week, Rep. Anna Paulina Luna criminally referred Powell to the Department of Justice (DoJ) for two instances of lying under oath.