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Interest rates fall in December? BlackRock expert warns of job losses!
BlackRock CIO Rick Rieder expects the Fed to cut interest rates in December despite concerns about AI's labor market performance.
Interest rates fall in December? BlackRock expert warns of job losses!
On November 7, 2025, BlackRock Chief Investment Officer Rick Rieder expressed his assessment of the Federal Reserve's future monetary policy. He predicts the Fed is likely to cut interest rates in December. This forecast is in the context of the current economic situation and inflation expectations.
Although some members of the Federal Open Market Committee (FOMC) are considering a possible pause in rate cuts, Rieder believes another cut is more likely. This is mainly due to the indications that inflation is under control. The current core PCE inflation rate is around 2.5% over a six-month period, while other metrics are closer to 3%.
Inflation and market developments
Rieder emphasizes that inflation expectations in the market do not appear to be worrying. Five-year inflation expectations are at 2.5%, indicating some stability. He is optimistic about the U.S. economy but also expresses concerns about the job market given the rise of artificial intelligence (AI).
Labor market weakness is expected to continue while productivity increases through technologies such as AI and improvements in inventory management and logistics. Rieder emphasizes that corporate profits are resilient, supported by falling costs and increasing mergers and acquisitions as companies look to grow and vertically integrate.
Technological progress and corporate strategies
A key aspect of current business strategies is that companies use data and AI to optimize their operations. This also leads to a reduction in fixed infrastructure, including the size of the workforce. Despite these challenges, Rieder sees positive developments in the corporate sector that contribute to the stability of the economy.
Rieder's remarks reflect the current challenges and opportunities facing the U.S. economy as the Fed considers how best to respond to the changing economic landscape. Daily Hodl reports that Discussions within the Fed continue to be characterized by uncertainty, particularly regarding Chairman Jerome Powell's response to the rapidly changing economic situation.