BlackRock's Rieder Says U.S. Economy to Grow More Than 3%

BlackRock Inc.’s Rick Rieder said he expects the U.S. economy to expand by more than 3 percent this year, helped by consumption and housing.

“The economy will grow faster than people think,” Rieder, chief investment officer for fixed income at New York-based BlackRock, said during a Bloomberg TV interview on “Market Makers” with Erik Schatzker and Stephanie Ruhle.

Employment will improve at a slower rate than the economy because of technological advances, which means inflation won’t be much of a concern, Rieder said.

Rieder’s outlook is more optimistic than that of most economists. Gross domestic product will expand 2.6 percent this year, according to the median estimate of 78 economists surveyed by Bloomberg. Small business lending, education and improving real estate will help stimulate hiring, Rieder said.

“You do not need more QE to get people hired,” he said, referring to the Federal Reserve’s unprecedented program of buying assets.

Rieder, who runs the $11.4 billion BlackRock Strategic Income Opportunities Portfolio, said he sees opportunities in transportation and university municipal bonds, and is being more careful with sovereign debt from Spain, Italy and Portugal, since those bonds may be “running out of gas.”

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