Bloomberg Talks: BlackRock’s Rick Rieder on the Labor Market

Date: November 12, 2025
Host: Bloomberg
Guest: Rick Rieder, BlackRock CIO of Global Fixed Income

Episode Overview

This episode features an in-depth interview with Rick Rieder, BlackRock’s Chief Investment Officer of Global Fixed Income, and a widely watched candidate to replace Federal Reserve Chair Jay Powell. The discussion centers on the evolving U.S. labor market, the interplay of technology and productivity, interest rate policy, inflation trends, and investment strategies in today’s unique macroeconomic environment. Rieder provides insider perspectives on both policy and investment decision-making, exploring how AI and automation are reshaping employment and productivity, and sharing how BlackRock is positioning portfolios in response.

Key Discussion Points & Insights

1. Labor Market Dynamics: Structural, Not Cyclical (00:55–03:04)

• Not Just a Cycle:
  Rieder emphasizes that current labor market shifts are structural, not just part of a typical economic cycle.

  “I think we have a productivity revolution that is pretty extraordinary… Companies are doing more with less. And I think that is a secular dynamic that's going to be with us for a couple of years now.”
  — Rick Rieder [00:58]

• AI, Automation & Robotics:
  The rise of AI, robotics, automation, logistics, and predictive analytics is enabling companies to boost output with fewer workers, fundamentally changing employment patterns.

• Wage Growth vs. Employment Growth:
  There’s a divergence, with strong top-line revenue and earnings but weak employment gains—a result of firms reducing costs and streamlining operations.

  “Companies… are cutting costs of goods sold, they're cutting their SG&A costs, they're reducing their cost infrastructure. By the way, AI… robotics and automation… Is literally designed to run, replace human input.”
  — Rick Rieder [01:50]

2. Interest Rate Policy and Its Limits (03:04–06:37)

• Interest Rate Cuts as a Tool:
  Rieder argues that as labor markets slow, the case for cutting interest rates strengthens—especially to support interest rate–sensitive areas of the economy like housing, small business, and low-income consumers.

  “If you actually get the mortgage rate down a bit… you get housing velocity. Why is housing velocity important? Because you get labor mobility. So… you can’t move, you lose your job, you can't go somewhere else.”
  — Rick Rieder [03:21]

• Balancing Inflation & Employment:
  He’s comfortable tolerating some inflation above the 2% target if it spurs job creation, noting that some inflation sources (health care, education, insurance) are unresponsive to rates.

  “It’s pretty hard using interest rate tool to get insurance costs down. It’s pretty hard to get to health care. So the tool is not that robust.”
  — Rick Rieder [04:56]

• Sticky vs. Runaway Inflation:
  “If you were at 2 and 3/4… If you take the whole full construct of inflation, 3 is not an infectious… if you're running 4 or 5, then I'd say, Gosh… then I think you'd have to address that just to.”
  — Rick Rieder [05:26]

• Capex & the Limits of Monetary Policy:
  Today’s investment boom—especially from tech leaders like OpenAI, Nvidia, and Google—is driven by long-term structural imperatives not highly sensitive to interest rates.

  “It’s not the interest rate tool that is affecting capex. They are going to put that capex in because there is a long run benefit for doing it.”
  — Rick Rieder [06:37]

3. Housing: Inventory, Mobility, and Inflation (07:33–08:39)

• Unlocking Labor Mobility:
  Housing affordability and mobility hinge on mortgage rates; lowering rates would accelerate home sales, inventory, and construction—thus supporting jobs and curbing rent inflation.

  “If you got the mortgage rate into the fives… you would see some velocity of housing… You create more inventory, you take the pressure off … rental rates and you start to bring inflation down.”
  — Rick Rieder [07:42]

4. Policy Innovation Beyond Interest Rates (08:39–10:57)

• Rethinking the Fed’s Toolkit:
  The traditional focus on the overnight funds rate is outdated given today’s financial structure. Other tools, like managing the Fed’s balance sheet and affecting different points on the yield curve, should be considered.

  “The front end of the yield curve doesn’t really do a lot… you have a lot of tools that create much more effectiveness than just 'we’re going to move the overnight funds rate every six weeks.'”
  — Rick Rieder [08:43]

• The Fed's Balance Sheet:
  Adjusting the composition and duration of assets, especially on the longer end, could help stabilize mortgage rates and support the real economy without dramatic rate cuts.

  “If you can keep the stability of the back end… mortgage spreads could come in. Then you get… Mortgage velocity moving.”
  — Rick Rieder [09:37]

5. Investment Strategy and the Current Market (10:57–16:57)

• Best Environment for Investors in Decades:
  Rieder describes the present as the “best investment environment” he’s ever seen thanks to macro divergence and technological shifts.

  “This is the best investment environment I’ve ever seen… you have divergence that is great for investing. You have technology that's changing… the ability to look at tech stocks, health care tech…”
  — Rick Rieder [11:01]

• Flexible Portfolio Positioning:
  BlackRock’s iShares Flexible Active Income ETF (“bank”) keeps duration close to four years, rotates credit exposures, increases mortgage allocations, and selectively adds emerging market debt.

  “We’ve shifted some of our credit into Mortgages… If you believe rate volatility is going to be down, mortgages have become interesting… We’ve bought a little bit of em recently…”
  — Rick Rieder [12:06]

• Risk Discipline Even if Rates Fall:
  Higher yields on cash and bonds mean investors don’t need to “go far out the risk curve.” If rates fall, Rieder won’t stretch for yield.

  “I’m not a believer… I got to keep that yield, I got to get my risk up. You just have to absorb it and say… I'm going to run five and three quarters of six.”
  — Rick Rieder [13:21]

• Market Bubbles & Constraints:
  Some pockets—private markets in particular—are showing signs of excess, but nothing systemic yet.

  “There’s some things that are bubbling in the markets … mostly in privates, … you see some parts of it where people have stretched… But I don’t… see… excessive low, low covenant or easy covenants high LTV financing, I don’t see that yet today at the around the edges a little bit.”
  — Rick Rieder [14:30]

6. Equities Outlook: Selective Optimism (15:40–16:57)

• Double-Digit Equity Gains Possible:
  Rieder sees ongoing equity gains driven by productivity and ROE, but concentrated in tech, health care, and high-ROE financials.

  “I think equities are… still going up 15 to 20% from where they are over the next year... Take the highest ROE businesses… tech, health care, tech. Some of the financials, they’re doing really well. They throw off a lot of earnings…”
  — Rick Rieder [15:46]

• Concentration vs. Diversification:
  He runs a “moderate long” equity book, with some reduction in beta during volatility spikes, but emphasizes concentration in high-quality names benefiting from the productivity surge.

Notable Quotes & Memorable Moments

• On Technology & Labor:

  “This technology… is literally designed to run, replace human input. You have a dynamic that is pretty extraordinary.”
  — Rick Rieder [01:50]

• On Housing & Wealth:

  “For every home built in this country, we hire 3.1 people. It's pretty hard to AI building a house.”
  — Rick Rieder [03:21]

• On Inflation Tradeoffs:

  “If you take the whole full construct of inflation, 3 is not an infectious…if you’re running 4 or 5, then I'd say, Gosh...”
  — Rick Rieder [05:26]

• On the Current Investment Climate:

  “This is the best investment environment I’ve ever seen… you have divergence that is great for investing.”
  — Rick Rieder [11:01]

Important Timestamps

| Timestamp | Topic | |-----------|---------------------------------------------| | 00:55 | Productivity revolution, secular labor shifts| | 03:21 | Rate cuts, housing, labor mobility | | 04:56 | Inflation: tradeoffs and sticky drivers | | 06:37 | Capex cycle, limits of interest rate policy | | 07:42 | Housing inventory and mortgage rates impact | | 08:43 | The Fed’s toolkit beyond interest rates | | 09:37 | Using the Fed’s balance sheet | | 11:01 | Current investment environment | | 12:06 | ETF strategy and asset allocation | | 13:21 | Risk posture if rates fall | | 14:30 | Market excess and discipline | | 15:46 | Equity outlook and high-ROE stocks |

Tone and Language

Throughout, Rieder’s tone is pragmatic, data-driven, and slightly optimistic, balanced with caution on structural labor changes and selective on investment opportunities. He is nuanced about the tradeoffs policymakers and investors face, often thinking in multi-faceted quadrants of risk. The discussion maintains a collegial, high-level tone throughout.

For listeners seeking a deep dive into macro trends, labor, and investing in the era of AI and high rates, this episode offers a masterclass in reading between the lines—both for policymakers and portfolio managers.