BlackRock’s top strategist expects US dollar to continue to weaken

A top strategist at BlackRock, the world’s largest fund manager, say that the status of the US dollar is no longer as invincible as it once was. In a new interview with Semafor Business, BlackRock’s Rick Rieder shares his vision for the future of the money world.

Rieder is not just anyone, as he is the big boss of a BlackRock portfolio that contains $ 2.4 trillion in assets.

Lots of alternatives

Rieder notes that there are currently many alternatives on the market. He mentions, among other things, the Chinese yuan and our own euro, but Rieder also notes that part of the market is looking at crypto, and Bitcoin in particular. Furthermore, Rieder sees that gold is going through a good period.

All in all, those alternatives are so slowly but surely eating through the defensive wall of the US dollar. The fortress that seemed so impregnable in recent decades is becoming weaker and weaker.

On the other hand, we should not forget that the US dollar is still by far the most dominant currency on earth. In the end, it remains to be seen whether other currencies will actually succeed in gaining market share from the dollar in the coming years.

According to Rieder, it has mainly been the sanctions that ensure that institutional investors are now trying to build a more diverse portfolio. Where they would initially flee to the dollar in times of economic disaster, that is no longer necessarily the case, he says.

Interest rates down

Furthermore, Rieder predicts that interest rates will already be lower next year than the interest rates we are currently seeing in the United States. Although he thinks it is unlikely that we will make another visit to the extremely low interest rates that we have been blessing for the past 10 years.

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According to BlackRock’s director, the artificially low interest rates have caused huge price increases in various assets, which must now correct.

“I think interest rates will come down next year, but they will be higher than you would say historically. Markets are funny. Because they often believe that things go back to the old situation. That is what we see today,” said Rieder.

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