BlackRock sees opportunity in market pivot points as global bond landscape splits

• diverging global economies
• technological disruption
• an evolving monetary backdrop.

The report emphasizes that desynchronization among major regions has broadened diversification potential: “Managing diversification in a period of desynchronization could be regarded as a common goal for all investors,” says Rieder.

In the US, the Fed’s shift toward rate cuts reflects a balancing act between persistent inflation and a softening labor market.

“In the US, the post-Covid era inflation remains elevated and complicates things for the Fed as the labor market is softening,” Rieder says, cautioning that while aggregate economic data looks resilient, stress is mounting for lower-income households and smaller businesses more sensitive to borrowing costs.

“While some aspects of our economic and political landscape have generated uncertainties that can be unsettling, opportunities abound for those willing to do the work,” he says.

BlackRock’s team also highlights how technology and data are reshaping fixed income investing with senior portfolio manager Jeff Rosenberg noting that the rapid adoption of artificial intelligence is changing how investors identify macro trends.