Federal Reserve Chair nominee Rick Rieder: Supports interest rate cut to 3%

Rick Rieder, BlackRock's global chief fixed income investment officer and a potential successor to Federal Reserve Chairman Jerome Powell, is scheduled to meet with US President Donald Trump on Thursday. At this time, Rieder reiterated his support for cutting the US benchmark interest rate to 3%, a level that would be the lowest in more than three years. In a CNBC interview that aired on Monday, Rieder said he has repeatedly expressed his desire for interest rates to fall to 3% for months. He reiterated his support for this move on Monday, which would lower borrowing costs by at least 50 basis points (0.5 percentage points) from current levels. The current target range for the federal funds rate is 3.5%–3.75% after Federal Reserve officials cut rates by 25 basis points in December. “I think the Fed does have some policy room to maneuver,” Riddell said. “My position has been very clear over the past few months. The Fed must lower interest rates, and I don’t think it needs to be lowered too much, eventually to 3%—that level is closer to the neutral rate.” The neutral rate is a theoretical level of borrowing costs that is neither stimulative nor restrictive, and can maintain the smooth operation of the U.S. economy.