Rick Leader, the chief investment officer of BlackRock’s global bonds, is sticking to a call from the Federal Reserve to cut jumbo fees next month after new inflation data showed less price pressure than expected. “The Fed expects to begin cutting rates in September, which will justify reducing the rate of funds by 50 basis points, further aligning it with long-term inflation expectations and some of the productivity gains seen in multiple industries.” (One basis points equals 0.01%.) The half-cut in September reflects the Fed’s move, which began its mitigation cycle in September 2024 with a major rate cut. His comments came after the consumer price index showed seasonally adjusted 0.2% and 2.7% for the month increased by 0.2% over 12 months. The year-over-year rise was softer than the Dow Jones estimate of 2.8%. The Wall Street investor leader has increased the chances of a half-point cut after a July employment report released Friday showed a dramatic slowdown in the labor market. BlackRock manages $3.1 trillion in bond assets on behalf of its clients. “Today’s inflation report was a little stronger than we saw in the last few months, but lower than many people were afraid,” the leader said. “We are still encouraging to the trajectory of inflation that is running at a lower level than in the past few years.” Excluding food and energy, CORE CPI increased by 0.3% that month, 3.1% from a year ago, but forecasts were 0.3% and 3%. The monthly core rate was the biggest increase since January, but the annual rate was the highest since February.
