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10-Year Yield Could Drop to 1.5%: BlackRock Pro

Doug Kass, who calls shorting bonds the trade of the decade, might not like hearing this. A top PM at BlackRock says just the opposite.

Rick Rieder BlackRock Chief Investment Officer of Fixed Income believes yields on the 10-year could go as low as 1.5%. (In the bond market yields and price are inversely related.)

Rieder is with Kass on one point - “It’s hard to argue that Treasurys currently present value,” he says during an interview on CNBC’s Fast Money Halftime Report.

However, that might not matter.

Rieder goes on to say, worrisome headlines about Greece and Spain surfacing almost every day are generating a lot of fear.

As a result, “There’s an on-going flight to quality and there are very few safe assets,” to which investors can turn.

And although Rieder believes yields will end the year higher, in the near term he says, they could trade down to 1.5%.”

And when yield do finally turn higher, he says don’t look for a spike.

He also says, “too many funds need yielding assets of high quality and there just aren’t that many.”

Want to check out what Kass had to say about bonds? Click here to go to "Doug Kass Shorts Bonds, Says Safety Premium Too Great"


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Trader disclosure: On May 9, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Anthony Scaramucci is long AAPL; Anthony Scaramucci is long BAC; Anthony Scaramucci is long GS; Anthony Scaramucci is long IBM; Anthony Scaramucci is long PEP; Pete Najarian is long AAPL; Pete Najarian is long C; Pete Najarian is long MS CALLS; Pete Najarian is long INTC; Pete Najarian is long INTC CALLS; Pete Najarian is long YHOO; Pete Najarian is long SBUX; Pete Najarian is long SBUX CALLS; Pete Najarian is long PEP


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