BlackRock’s Rick Rieder says raising rates further won’t fix what’s left of inflation

The July 2026 Consumer Price Index came in at 3.4% year-over-year, exactly where Wall Street expected it. Rick Rieder, BlackRock’s Chief Investment Officer of Global Fixed Income, thinks the celebration is warranted, but only up to a point. Rieder’s take, delivered shortly after the August 12 CPI release, boils down to a deceptively simple argument: inflation is close enough to controlled that the Fed’s main tool, raising the overnight policy rate, probably can’t do much more heavy lifting from here. The economy is “in the ballpark,” as he put it, and the remaining gap between 3.4% and the Fed’s 2% target may require patience more than additional rate hikes. The numbers behind the optimism Month-to-month core CPI volatility has returned to pre-pandemic norms, according to Rieder’s team at BlackRock. When the monthly swings calm down, it suggests the underlying price pressures are becoming more predictable and less driven by supply shocks or pandemic-era distortions. Five-year inflation breakevens, a market-derived measure of where investors expect inflation to land over the medium term, are currently anchored near levels consistent with the Fed’s 2% core PCE target. Since January 2...