BlackRock's Rieder: The easy money casino is closed. Here is the playbook for 2026

Rick Rieder from BlackRock warns that the era of easy returns is over and provides a roadmap for investment strategies in 2026. Between 2020 and 2025, many investors enjoyed high returns, but now a more strategic approach is necessary due to concerns about the labor market and its impact on inflation. Wage growth is slowing and hiring is down, prompting potential policy shifts from the Federal Reserve. Rieder highlights the transformative impact of AI on corporate cost structures, emphasizing investments in companies that are effectively using technology to reduce costs and expand margins. He expects a shift in focus from revenue growth to margin enhancement. The macro environment for 2026 is projected to see 2% real growth but with higher capital costs, reintroducing idiosyncratic risk and possibly more defaults. In conclusion, Rieder stresses the importance of asset selection, advising investors to focus on high-quality fixed-income assets and strong balance sheets. Moving forward, companies with durable cash flows using AI effectively are likely to be the most attractive investments.