BlackRock's Rick Rieder Says Rising Debt Costs Curb Investment

  • CIO says that economic growth in the U.S. is decelerating
  • U.S. companies face shrinking profit margins, he says

Rick Rieder, chief investment officer of global fixed income at BlackRock Inc., said U.S. companies face challenges investing as debt costs rise, putting a drag on the economy.

"The cost of debt has moved up markedly," Rieder said in a television interview on "Bloomberg <GO>." "It has to dull your willingness to invest going forward."

Rieder said companies must also deal with narrowing profit margins as wages head higher and sales and administrative costs rise. The economy is getting a boost from consumer spending and the trend will continue for a period of time, the CIO added.

"I don’t think we are falling off a cliff," he said. "You are decelerating a bit. The U.S. is such driver of growth in the world, it is something you have to be thoughtful about."

Rieder said the European economy is speeding up to a growth rate of 1.5 percent, encouraged by central bankers’ easy monetary policy.

"Europe is in a sweet spot today," he said.

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