MutualFundWire.com: A Fixed Income Guru Blames Volatility on Emerging Markets

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Tuesday, July 2, 2013

A Fixed Income Guru Blames Volatility on Emerging Markets

Co-head of BlackRock [profile]'s Americas Fixed-Income Group, Rick Reider, doesn't think the Fed statement was the only driving force behind market volatility in the past couple of weeks, InvestmentNews' Jeff Benjamin reported. He blames Japan, China and emerging markets as well.:

I actually think the Fed is getting too much credit — or blame — for the volatility. I think this all started with the markets in Japan, where people are starting to question the banking policy. Then there is the slowdown in China and the emerging markets.

Reider looks forward to a step back from quantitative easing and says he thinks that the economy will support such a move. The BlackRock executive says he thinks the Fed will start tapering in the fall and gradually remove the program in mid-2014, before moving the funds rate in 2015. When asked which fixed income markets are showing promise right now, Reider said:

Two months ago, there were so many crowded trades, but now things are starting to make sense again. The emerging markets and high yield are starting to show some value, as well as the commercial-mortgage area.