Bloomberg Money · Sep 25, 2026
With Jeffrey Rosenberg, Portfolio Manager of the iShares Systematic Alternatives Active ETF at BlackRock
Global forecasts for nominal GDP, which is real growth plus inflation, rose about 50 basis points this year, Jeffrey Rosenberg said, and the average rise in bond yields around the world almost exactly matched it.
Much of the talk about the bond selloff treats it as panic over US deficits. Rosenberg said the deficits are real but are only part of a global story about faster growth and more demand for capital.
"This isn't the bond market freaking out — this is the bond market recognizing that growth is higher in nominal terms."
Jeffrey Rosenberg, a senior portfolio manager in BlackRock's systematic investing group who runs its iShares Systematic Alternatives Active ETF, joined Bloomberg Money to explain the bond selloff in household terms, from mortgages and pensions to the classic 60/40 mix of stocks and bonds. The host introduced him as someone who took stochastic calculus for finance at Carnegie Mellon's Tepper School and can still talk plainly about personal finance and retirement.
The full segment is covered here so you can skip it.
Here are the 7 arguments that matter.
Key Takeaways
Rising yields reflect competition for capital from faster growth, AI spending and record government debt
The zero-rate era is over, and higher rates are a structural change, not a blip
The 60/40 portfolio is not back: with too much inflation, bonds stop protecting a portfolio when stocks fall
He suggests a 50-30-20 mix, with 20% in alternatives
Do not overly focus on the US fiscal deficit: global bond yields have moved with global growth forecasts
Pensions are better off at 5% rates; it was 0% rates that inflated their liabilities
Government intervention cannot lower yields without a real change in the fundamentals
Markets have to price a permanently higher level of debt and deficits
1. Competition for Capital
The host asked how to explain the current markets to a family. Rosenberg said bonds have reached the regular media and people are wondering whether the bond market is panicking. His answer was that interest rates are a price.
Interest rates are the cost of capital
"A very simple way of understanding what's going on in interest rates is that interest rates reflect the marginal cost of capital — there's an opportunity cost associated with them." — Jeffrey Rosenberg
He listed where the demand for capital is coming from: growth that is accelerating, capital spending on AI that is accelerating, and record debt and deficits, which mean more Treasury borrowing. All of that sits on top of the usual corporate bond financing, mortgage-backed security financing and refinancing.
Many borrowers are bidding for the same money
"This competition for capital is a big reason why we've seen this shift." — Jeffrey Rosenberg
