BlackRock believes markets may be too quick to dismiss the possibility of Federal Reserve rate cuts. Navin Saigal, the firm’s head of global fixed income for Asia Pacific, said there are now “sufficient factors” that could justify a shift toward easier policy, even as many investors remain focused on sticky inflation.

The core argument is that the U.S. economy faces more than just price pressure. BlackRock sees artificial intelligence investment as a force that could eventually lift productivity, but also weigh on employment in parts of the economy. If labor-market weakness becomes more visible, the Fed may have room to cut rates or at least adopt a softer tone.

That view runs against part of the current market debate. DoubleLine’s Jeffrey Gundlach recently argued that a near-term cut is “not possible,” citing inflation and the level of short-term Treasury yields. In other words, BlackRock’s call is not consensus — it is a contrarian read on where the macro balance may be heading.

For markets, the disagreement matters. If BlackRock is right, bonds and rate-sensitive assets could benefit. But if inflation remains persistent, the Fed may stay cautious, and expectations for rapid easing could be pushed back again.