Rick Rieder predicts Fed may raise rates to 6%, leading to stock market decline


  • BlackRock’s CIO warns Fed may raise interest rates to 6% and maintain that level to tackle inflation.
  • Federal Reserve Chair Jerome Powell hints at the possibility of faster tightening measures.
  • The Dow Jones, Treasury notes yield, and S&P 500 ETF Trust experience declines in response.
fed raise interest rates

Rick Rieder, the Chief Investment Officer of Global Fixed Income at BlackRock, has reportedly stated that the fed raise interest rates can go up to 6% and maintain that level for an extended period to tackle inflation. According to a Reuters report, Rieder said this step might be necessary to slow the economy and bring inflation down to nearly 2%. 

Following Federal Reserve Chair Jerome Powell’s testimony before Congress, which indicated the possibility of faster-tightening measures, major Wall Street indices experienced a decline of over 1% on Tuesday.

Federal Reserve Chair Jerome Powell has indicated that the central bank may increase the pace of rate hikes if necessary. Powell warned against prematurely loosening policy and said that the Fed will stay the course until the job is done.

 As a result of this news, the Dow Jones closed 1.72% lower on Tuesday, with the 2-year Treasury notes yield surging to their highest level since 2007 at over 5%. The SPDR S&P 500 ETF Trust and Invesco QQQ Trust Series 1 also closed lower.

Traders are currently pricing in a 50 basis points hike by the central bank at its March policy meeting, according to the CME FedWatch Tool.
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