BlackRock’s Rick Rieder has questioned why central banks – notably the Federal Reserve – are persisting with inflation targets when their power to actually influence inflation has waned.

Citywire + rated Rieder, who is global chief investment officer for fixed income at the AM giant, told Citywire Selector more realistic ambitions need to be set.

‘If you create more inflation you are hurting lower and middle income. I think the central banks; well it is a myth to say you should create inflation. It is just not possible. I think the inflation target should be lower and part of my thesis is interest rates are not going much higher because there is no real impetus to get it higher.

‘They should modestly raise them but keep them lower than historically. People will be surprised when rates rise but they won’t have moved much. You have to keep it lower than it has been historically. I don’t believe in historic algorithms which say: “Rates need to be here, growth needs to be here, inflation needs to be here”. That doesn’t work.’

A longer-form interview with Rick Rieder will appear in the April edition of Citywire Selector magazine.