Rick Rieder, Chief Investment Officer of Global Fixed Income at BlackRock, stated that he is reducing exposure to US investment-grade and high-yield bonds while increasing holdings in emerging market debt, citing favorable valuations and a weaker US dollar.

In an interview on Friday, Rieder noted that yield spreads in the US credit market are currently near their lowest levels in three decades, making them insufficiently attractive amid increasing bond supply.

Rieder also mentioned that he has slightly trimmed his holdings of mortgage-backed securities in recent days. Although he still favors the sector, he said that "the enthusiasm for balance sheet discussions has cooled a bit."

US President Donald Trump recently nominated Kevin Warsh for the position of Federal Reserve Chair, a role Rieder was also considered for. Warsh, a former Federal Reserve governor, has long advocated for reducing the central bank's balance sheet, which currently includes approximately $2 trillion in mortgage-backed securities.

"We have been making significant adjustments to keep the portfolio dynamic and allocate to areas where we see the best opportunities," Rieder said. He helps manage $2.4 trillion in fixed-income assets.

When discussing the impact of artificial intelligence on markets, Rieder remarked that emerging markets appear highly attractive.

Part of his optimism toward emerging markets stems from their yield premium relative to US junk bonds, which he described as historically appealing.

"We really like emerging markets," he said. "The US dollar will remain constrained. The yield spread between emerging markets and high-yield bonds is almost at its best level ever."

He added that, following particularly strong performance in European markets last year, he has shifted some investments from Europe to Asia.