Rick Rieder, BlackRock’s chief investment officer of global fixed income, told CNBC he sees investment-grade corporate bonds as the strongest bond opportunity as AI infrastructure borrowing adds to competition with governments for capital.
CNBC reported Oct. 21 that Rieder described a hypothetical diversified portfolio with a yield above 7%, duration below three years and average credit quality of A-. He did not identify the securities, so the figures describe a scenario rather than a named fund or bond basket. Duration estimates a bond’s exposure to rate changes; a lower reading generally signals smaller price moves when rates shift. Referring to entry yields, Rieder said, “Your starting point is by far your best barometer.”
Rieder also said large cloud-computing providers generally have low leverage and substantial cash flow. He warned that borrowing to build AI infrastructure could compete with government debt for investor capital.
BlackRock’s Q4 2026 outlook describes government borrowing and private financing led by AI as competing demands. It says that competition is making capital more expensive, favors shorter-term bonds and urges care in choosing credit exposures. That puts investors seeking bond income alongside public and private borrowers facing higher funding costs.
BlackRock reported that its iShares Flexible Income Active ETF (BINC) had a 5.67% 30-day SEC yield and 3.00 years of effective duration as of Oct. 20. The fund holds a mix of U.S. high-yield and investment-grade credit, emerging-markets debt and securitized assets. Its iShares Aaa-A Rated Corporate Bond ETF (QLTA), which tracks U.S. dollar-denominated corporate bonds rated Aaa to A, had a 5.65% 30-day SEC yield and 6.46 years of effective duration as of Oct. 15. Neither fund represents Rieder’s unspecified hypothetical portfolio.
CNBC also reported that Rieder expects the Federal Reserve to raise rates in December, although he disagrees with that move. The Fed’s calendar lists meetings for Tuesday and Wednesday, Oct. 27-28, and Dec. 8-9.
