PANews reported on September 16 that according to Jinshi, BlackRock strategists have changed their stance on short-term U.S. Treasuries from overweight to insisting, saying that the market's bet on the extent of the Fed's rate cut is unlikely to succeed. As U.S. Treasury yields are already relatively high, BlackRock strategists favor medium-term U.S. Treasuries with maturities of 5 to 10 years. Wei Li, the company's chief investment strategist, said speculation that the Fed waited too long to ease policy and will now be forced to accelerate rate cuts to boost the economy is wrong.
In an interview, Wei Li said she expects the Federal Reserve to cut interest rates by 25 basis points on Wednesday. "We think the market has priced in a little too much for the depth of the rate-cutting cycle," Li said. "The rate-cutting cycle is starting, but the magnitude may not be as large as the market has priced in." While Li acknowledged that recession risks may have increased, she said her base case remains that the U.S. economy will slow rather than contract. At the same time, she said, policymakers remain cautious about "persistent" inflation in some areas of the economy. "What we've seen is that the U.S. has created an average of 164,000 jobs per month over the past six months, which is still a pretty strong pace," she explained.
