Closing Bell Closing Bell: How Far Can This Rally Go? 8/12/25
Aug 12, 2025
Rick Rieder, BlackRock's CIO of Global Fixed Income, shares insights on the stock market rally's potential and the backdrop of favorable economic indicators. Robert Kaplan, the former Dallas Fed president, weighs in on the likelihood of interest rate cuts and their implications for the economy. Liz Thomas from SoFi brings an optimistic perspective on market sentiment and prospects for a pause in rate adjustments. The conversation dives into investment strategies and sector performance, particularly in tech and energy.
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Exceptional Technicals And Yield Support
- Rick Rieder calls the current investment environment one of the best due to strong technicals, buybacks and fast earnings growth in large tech names.
- He also notes attractive fixed-income yields and cheap equity volatility hedges that improve downside protection.
Hedge Cheaply With Options And Overwrites
- Buy downside protection cheaply by using low equity volatility to hedge or convert straight equity into options positions.
- Overwrite large-cap holdings to collect premium while buying explicit downside protection.
Fed Cuts Are Plausible; Transmission Is Muted
- Rieder believes the Fed can cut and that there's room to lower the funds rate materially given improving core inflation and five-year inflation expectations.
- He argues the interest-rate tool's impact on inflation is limited today except via housing and low-income borrowers.