According to Odaily Odaily, Rick Rieder, BlackRock's global chief fixed income investment officer and a potential successor to Federal Reserve Chairman Jerome Powell, is scheduled to meet with US President Donald Trump on Thursday. At this time, Rieder reiterated his support for lowering the US benchmark interest rate to 3%, a level that would be the lowest in more than three years.
In a CNBC interview that aired Monday, Riddell said he has repeatedly expressed his desire for interest rates to fall to 3% for months. 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 Federal Reserve officials cut interest rates by 25 basis points in December, the current target range for the federal funds rate is 3.5%–3.75%.
“I think the Fed does have some policy room to maneuver,” Riddell said. “My position has been very clear over the past few months. The Fed must lower interest rates, and I don’t think it needs to be lowered too much; eventually it should be around 3%—that level is closer to the neutral rate.” The neutral rate is a theoretical level of borrowing costs that is neither stimulative nor restrictive, and can maintain the smooth operation of the U.S. economy.
