[BlackRock Turns Overweight on Short-Term U.S. Treasuries for the First Time in Six Years, Downgrades U.S. Equities] BlockBeats News, October 13 — BlackRock Investment Institute has adjusted its U.S. asset allocation, upgrading short-term U.S. Treasury ratings to overweight, while raising long-term U.S. Treasuries from underweight to neutral, marking the end of its nearly six-year underweight stance on U.S. Treasuries. At the same time, the institute downgraded U.S. equities from overweight to neutral, lowered U.S. agency mortgage-backed securities (MBS) ratings to neutral, and reduced its underweight position in Japanese government bonds. BlackRock has been underweight U.S. Treasuries since October 2020, when the 10-year Treasury yield was near 0.9%. Today, yields have risen above 5.2%. The institute believes yields have reached attractive levels and aims to lock in some higher returns, noting that market expectations for further tightening of monetary policy by the Federal Reserve may be excessive. Currently, the interest rate swap market reflects traders' expectations of at least three rate hikes of 25 basis points each over the next 12 months. BlackRock pointed out that U.S. Treasury yields would need to rise another 75 basis points over the next 12 months to fully offset the income generated by bonds. Regarding U.S. equities, BlackRock attributed the downgrade to "potential volatility brought by AI development." As AI-driven capital expenditures and financing demands increase, high interest rates are making return disparities among companies more pronounced, requiring investors to assess whether firms can generate returns exceeding their cost of capital. The institute emphasized: "We are managing near-term risks, not changing our core convictions." BlackRock remains optimistic about AI-related companies and listed infrastructure, preparing to increase risk exposure again when visibility improves and attractive entry points emerge.