Blackrock says the Federal Reserve should lower interest rates to 3%!
BlackRock's Chief Investment Officer of Global Fixed Income (and a reported candidate for the next Federal Reserve Chair under consideration by President Trump), reiterated his long-held view that the Fed should cut the federal funds rate down to around 3%.He stated in a CNBC interview that this level is closer to a neutral "equilibrium" rate, and he's been pushing this idea for months. The comments came amid reports that Trump plans to interview Rieder for the Fed Chair role.
Current Fed Rate
As of early January 2026, the effective federal funds rate sits at approximately 3.64%, within the Fed's target range of 3.50%–3.75% (following a 25 basis point cut in December 2025).
This means Rieder's call would imply another roughly 50–75 basis points of easing from here, depending on how things play out.BlackRock as an institution (via its iShares and investment institute outlooks) has also mapped a cautious path toward rates closer to 3% over the course of 2026, aligning with a measured easing cycle assuming stable growth and cooling inflation.
This dovish stance from such a major player (BlackRock manages trillions in assets) is being widely discussed as bullish for risk assets like stocks and potentially crypto, as lower rates typically reduce borrowing costs, encourage investment, and support higher valuations.Markets are watching closely, especially with potential leadership changes at the Fed on the horizon.
What do you think — is 3% realistic this year, or too aggressive