BlackRock Joins Pimco Finding Bond Sweet Spots as Fed Looms

Pacific Investment Management Co. and Fidelity Investments are betting the Federal Reserve will keep rates low until inflation accelerates from today’s dormant levels. BlackRock Inc., the world’s largest investment company, favors intermediate-maturity U.S. debt as the sweet spot mixing safety and liquidity with returns.

“The Fed will do a great deal to head off the probability that the market prices in too many forward rate hikes,” said Gemma Wright-Casparius, who manages about $50 billion in Treasuries at Valley Forge, Pennsylvania-based Vanguard Group Inc., the largest private holder of Treasuries. Below-target inflation calls for only a gradual tightening of monetary policy, she said.