Rosenberg Sees Risk Assets Resilient Amid Potential Rate Hike

BlackRock's portfolio manager Jeffrey Rosenberg is reassuring investors that risk assets can handle a potential Federal Reserve rate hike. In an investment outlook, Rosenberg argues that strong corporate earnings, particularly those driven by artificial intelligence investments, can absorb the pressure from modestly higher borrowing costs.

Rosenberg believes that AI-linked productivity and revenue gains are outrunning the discount rate headwind caused by rising yields, which would otherwise reduce equity valuations. This view is reflected in BlackRock's mid-2026 investment outlook, which favors US equities as the best-positioned asset class to weather a higher-rate environment.

The firm forecasts a 2.5% one-year return for the Bloomberg US Treasury index even in a scenario where the Fed raises rates by up to 100 basis points over the next year. Rosenberg notes that the Fed is unlikely to surprise markets with an aggressive tightening push, given Chair Kevin Warsh's data-dependent approach.

This measured rate environment is generally constructive for crypto and digital asset markets, which have historically been sensitive to Fed policy through the risk-on, risk-off channel.