BlackRock Inc. remains “pro-risk,” namely on overweight U.S. stocks, but sees surging longer Treasury yields as one of three risks that could force a rethink in 2025, according to a team led by Jean Boivin, head of the BlackRock Investment Institute.
Yields have taken a rare route higher since the Federal Reserve started cutting rates last year, when looking at past easing cycles since the 1980s.
Yet surging bond yields “as markets price out rate cuts and corporate debt refinancings at higher interest rates” could spur a change in BlackRock’s outlook, as could U.S. tariffs and fiscal policy and any souring of investor risk appetite around corporate earnings or lofty tech valuations around AI themes, the team wrote in a Monday client note.