BlackRock’s Rieder sees Fed rate hike unlikely after July jobs report

BlackRock’s Rick Rieder has suggested that the U.S. Federal Reserve is unlikely to raise interest rates in the near term, following the release of the July 2026 employment report. The report indicated a decline in nonfarm payrolls by 23,000 and a slight decrease in the unemployment rate to 4.1%. Rieder’s comments, highlighted by Bloomberg Markets, suggest that the employment data might prompt the Fed to reconsider any plans for a rate hike this year. This view aligns with market trends that are increasingly supportive of scenarios where the Fed opts for rate cuts instead of hikes.

The current market pricing has shifted in response to Rieder’s remarks. The probability of a rate hike by the Federal Reserve’s September 2026 meeting has decreased to 36.5% from 44% just 24 hours ago. Similarly, the likelihood of a rate hike by the October meeting has also fallen, now standing at 49.5%. Conversely, markets suggest a potential increase in the likelihood of rate cuts, with the scenario that no rate cuts will occur in 2026 currently priced at 86.1% YES.

Rieder has been vocal about his stance on monetary policy, advocating for lower rates to avoid economic over-tightening. The recent labor market data appears to support his perspective, as it indicates a weakening that might necessitate a shift in the Fed’s approach to interest rates.

Key Takeaways

• Markets suggest a lower likelihood of a Fed rate hike following Rieder’s comments and recent employment data.
• The probability of no Fed rate cuts in 2026 remains high, currently priced at 86.1% YES.
• Rieder’s position and the latest labor data align with market expectations of potential rate cuts.

What to Watch

Market participants will be closely monitoring upcoming Federal Reserve statements and economic data releases, such as inflation reports and further employment statistics, for indications of the Fed’s future policy direction. Any significant changes in unemployment or inflation figures could influence the likelihood of rate hikes or cuts. Additionally, Federal Reserve Chair Jerome Powell’s public comments and the FOMC’s September meeting will be key indicators of the Fed’s policy trajectory moving forward.

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