While Rieder hopes the Fed will still begin raising rates in September, the current market volatility is making it difficult, he said.

"I think they should go and I think the markets would be in better shape if they do, but that being said I think the confluence of opinion around if they will go has waned," Rieder said.

If the Fed does not raise rates in September, Rieder thinks it unlikely it will do so later in the year.

Rieder, who manages BlackRock's unconstrained bond fund, the $31 billion Strategic Income Opportunities Fund, has predicted the Fed would start raising rates in September.

It now appears that a September rate increase is less likely but not completely out of the question, he said.

"A lot can happen between now and middle of September," he said.

In the meantime, Rieder is finding opportunities in these markets. BlackRock, the world's largest asset manager with $4.7 trillion in assets under management, has been buying investment grade credit in industrials, Rieder said. "We are dipping a toe in." He declined to elaborate.

BlackRock has also been buying 10-year Treasuries over the past couple of weeks on the theory that the current market volatility will push back the Fed from raising rates, Rieder said.

"In that situation, the back end of the curve can still rally," he said.

(Reporting by Jessica Toonkel in New York; Editing by Chris Reese and Matthew Lewis)

By Jessica Toonkel