By Davide Barbuscia

NEW YORK (Reuters) – A sell-off in U.S. stocks and bonds will likely dry up during the summer months as the Federal Reserve whittles down its nearly $9 trillion balance sheet, said Rick Rieder, chief investment officer of global fixed income at Blackrock (NYSE:), the world’s largest asset manager.

Rieder believes the Fed’s balance sheet reduction, which is expected to begin in June, will prove a “catalyzing moment” for asset prices and after that confidence may return to markets. Markets have been shaken by the central bank’s hawkish pivot, which is targeting the worst U.S. inflation in decades.

I believe we will see stronger markets beginning in the summer. … A lot will happen between now and then,” Rieder told Reuters in an interview.

But Rieder thinks the long-term bull market in bonds, which has been ongoing for many decades, is over.

“We’ve seen the end of the bond bull market: There’s a structurally higher inflation because of deglobalization, supply chain evolutions, stickier infrastructure costs,” he said.

After falling to its highest closing peak on Jan. 3, the bear market was confirmed within striking range. Bonds have had the worst year-to-date.

After having raised its overnight benchmark interest rate by 75bps this year, the Fed will likely increase interest rates 50bps in June and July. In June, it also announced that it would begin removing assets from its balance sheets in June at twice as fast as it did during its “quantitative tightening”.

Reider feels that there is a near-end to a surge in Treasury yields. They move in the opposite direction of bond pieces. Last week, yields on the 10-year Treasury benchmark hit 3.2%, a record high for three years.

Reider stated that ten-year yields may reach a maximum limit of 3.25% or 3.5% for a maximum, but he anticipates they will decline in the next few months.

Rieder claimed that at most 90% of this year’s rate moves have been recorded.