Unfazed by Middle East tensions driving inflation higher, BlackRock's bond chief reiterates: The Federal Reserve should cut interest rates as soon as possible.

BlackRock’s Head of Bond Markets Rick Rieder reiterated his view that the Federal Reserve should cut interest rates, dismissing speculation that rate hikes are related to the Iran war. Rieder added that fluctuations in energy prices might be a reason for the Fed to remain patient in cutting rates, but the Fed should still act quickly to lower interest rates.

Rieder stated, “Small businesses, young people, and low-income groups are really being affected by these high rates.”

His stance in favor of rate cuts aligns with the White House’s calls for accommodative monetary policy, as he was once one of the candidates nominated by Trump to succeed Jerome Powell as Fed Chair. Trump criticized Powell for not cutting rates fast enough, ultimately choosing Kevin Woots for the position in January.

As Chief Investment Officer of Fixed Income at BlackRock, Rieder manages approximately $3 trillion in assets. In recent weeks, he has ramped up fundraising efforts, planning to launch his first hedge fund in years. Reports suggest this fund, named TriaXial, will integrate various investment philosophies from BlackRock’s fixed income division.

His visit to Texas comes as BlackRock is increasing its investments in the state. Previously, BlackRock faced resistance over its climate-focused initiatives and has been working to gain support from conservative leaders in Texas.

Last year, Texas removed BlackRock from its list of companies accused of boycotting fossil fuels. Prior to that, during a three-year deadlock over BlackRock’s climate policies, the state government had withdrawn billions of dollars in investments from BlackRock. The firm exited the “Net Zero Asset Managers Initiative” and stopped participating in “Climate Action 100+,” an investor coalition aimed at reducing greenhouse gas emissions. BlackRock was also an early investor in the Texas Stock Exchange.