Federal Reserve Chair Candidate Rick Rieder: Supports Cutting Interest Rates to 3%

Odaily News BlackRock's Global Chief Investment Officer of Fixed Income, Rick Rieder, a potential successor to Federal Reserve Chair Jerome Powell, is reportedly scheduled for an interview with U.S. President Donald Trump on Thursday. On this occasion, Rieder reiterated his support for lowering the U.S. benchmark interest rate to 3%, a level that would set a new low not seen in over three years.

In a CNBC interview aired on Monday, Rieder stated that he has been repeatedly expressing his desire for rates to fall to 3% for several months. He reiterated his support for this move on Monday, which would lower borrowing costs by at least 50 basis points (or 0.5 percentage points) from current levels.

Following a 25 basis point rate cut in December last year, the Federal Reserve's current target range for the federal funds rate stands at 3.5% to 3.75%.

"I think the Fed does have some room to maneuver on policy," Rieder said. "My stance has been very clear for many months now. The Fed must cut rates, and I don't think it needs to cut by much—ultimately landing at 3% would be sufficient. That level is closer to the neutral rate." The neutral rate is a theoretical level of borrowing costs that is neither stimulative nor restrictive, allowing the U.S. economy to run smoothly.