BlackRock CIO: Long-term U.S. Treasuries are currently unappealing, while U.S. stock returns are more attractive
BlackRock CIO Rick Rieder stated that the investment opportunities in the U.S. stock market are currently more attractive, leaning towards buying stocks rather than long-term bonds. He pointed out that short-term bonds are more appealing in terms of yield, and the correlation between long-term bonds and stock market volatility has increased, making them no longer effective in hedging risks. Rieder believes that the expected return on stocks is 19%, making them a more attractive investment choice. Although long-term bonds may become attractive in the future, the current market trend is more inclined towards stock investments
According to the Zhitong Finance APP, Rick Rieder, Chief Investment Officer (CIO) of BlackRock's Global Fixed Income Business, believes that there are more investment opportunities in the current U.S. stock market, whereas the long end of the U.S. Treasury yield curve does not present the same. Rieder stated that from a yield perspective, short-term bonds are more attractive. However, he also pointed out that the correlation between long-term bonds and stock market volatility is increasing, and they can no longer serve as a hedge against risk. In his view, in this context, the expected return on stocks makes them a more attractive asset in a portfolio.
He said, "Today, I am more inclined to invest in stocks. The net asset return on stocks is 19%. So think about it, the book value of the stocks I hold will grow by 19%—I can achieve this growth in two years, or I can buy long-term bonds when interest rates are below 5% (at that time, the annual consumer price increase was about 2.4%). I would choose equities, especially growth equities."
Due to uncertainties regarding President Trump's trade policies and future spending plans of the U.S. government, prices of both asset classes have fluctuated in 2025. This year, the total return of the S&P 500 Index has risen nearly 6%, driven by stocks represented by growth-oriented technology stocks, leading to a strong rebound from the April low, which has set a historical high for the index. Meanwhile, the iShares 20-Year Treasury Bond ETF (TLT), with a scale of $49 billion, has a total return of about 2% so far this year.
Rieder stated that as inflation and interest rates decline, long-term bonds will eventually become attractive. However, for now, he is prepared for the expected yield curve to steepen—that is, betting that the performance of longer-term bonds will lag behind that of shorter-term bonds. This trade has been quite popular this year, partly due to concerns that the ever-expanding U.S. federal deficit will lead to an increase in bond issuance.
Rieder said, "There will always be a moment when we want to hold assets with a certain duration. But I don't think this is the mainstream trend in the current market."
