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Powell on Fed Policy Moves: The Time Has Come
by Richard Clarida of PIMCO, 8/26/24

In his annual Jackson Hole speech, Fed Chair Powell assessed the post-pandemic U.S. economy and suggested rate cuts are coming soon.

Developed Market Public Debt: Risks and Realities
by Peder Beck-Friis, Richard Clarida of PIMCO, 7/19/24

In the post-pandemic fiscal landscape, government debt trajectories may be volatile, but appear broadly sustainable.

Yield Advantage
by Richard Clarida, Andrew Balls, Daniel Ivascyn of PIMCO, 6/5/24

The global economy continues to recover from pandemic aftershocks, including trade dislocations, outsize monetary and fiscal interventions, a prolonged inflation surge, and bouts of severe financial market volatility. At PIMCO’s 2024 Secular Forum, we explored how the aftereffects of those disruptions are producing some unexpectedly positive developments while introducing longer-term risks.

Will the True Treasury Term Premium Please Stand Up?
by Richard Clarida of PIMCO, 4/30/24

Various methods to estimate this key bond market gauge differ on details but appear to signal rising investor compensation.

One Hike, Three Hints, and a Surprise Rate Cut
by Richard Clarida of PIMCO, 3/28/24

Recent signals from major central banks suggest challenges ahead with easing monetary policy amid above-target inflation.

Bond Markets Overlook U.S. Debt Trajectory, For Now
by Libby Cantrill, Richard Clarida of PIMCO, 2/26/24

Debt levels will likely continue to rise absent policy changes, and the yield curve is likely to steepen.

Major Central Banks Maintain Hard‑Line Stance on Inflation
by Richard Clarida of PIMCO, 10/15/23

“Restrictive for longer” is now the mantra as monetary policymakers seek to bring inflation reliably to target.

At Jackson Hole, Fed Reinforces Policy Stance
by Richard Clarida of PIMCO, 8/31/23

The Fed chair’s high-profile speech emphasized the central bank’s focus on taming inflation.

Bond Market Outlook: Valuations Suggest Potential for Equity‑Like Returns With Less Risk
by Richard Clarida, Daniel J. Ivascyn, Kimberley Stafford of PIMCO, 7/26/23

High-quality fixed-income assets may offer the best return potential in more than a decade along with diversification benefits as a likely recession approaches.

Fiscal Arithmetic and the Global Inflation Outlook
by Peder Beck-Friis, Richard Clarida of PIMCO, 7/10/23

Debt-financed fiscal policy is driving much of today’s high inflation, but as pandemic-era measures fade, central banks will likely return to their key role in managing price levels.

The Aftershock Economy
by Richard Clarida, Daniel Ivascyn, Andrew Balls of PIMCO, 6/9/23

The first few years of the 2020s have seen a number of acute economic, financial, and geopolitical disruptions on a worldwide scale, and it will take time for the ultimate consequences of these shocks to be fully felt.

Markets Are Finally Listening to Fed’s ‘Ongoing Increases’ Message
by Richard Clarida of PIMCO, 2/23/23

Bond markets are pricing in additional Federal Reserve interest rate hikes, acknowledging the central bank’s emphatic resolve to tame inflation despite the likely trade-offs.

The Fed: More Confident on Outlook and Inflation Target
by Richard Clarida of PIMCO, 2/1/18

Going into Federal Reserve Chair Janet Yellen’s 32nd and final meeting, neither we nor the markets expected the Fed to make much news. Of note, however, in its statement after the meeting on 31 January, the Fed acknowledged recent firmer economic data and expressed confidence in inflation moving toward the 2% target later this year.

Chair Yellen’s Last Act
by Richard Clarida of PIMCO, 12/14/17

Despite a rate hike, monetary policy remains accommodative.

The Powell Fed: Continuity in Monetary Policy
by Richard Clarida of PIMCO, 11/8/17

President Trump has announced Fed Governor Jerome Powell as his nominee for Chair of the Federal Reserve Board. A Fed governor since 2012, Powell has been confirmed twice by the U.S. Senate and likely will be confirmed as chair without controversy in time to take over when current Chair Janet Yellen’s term expires in February 2018.

Fed on Track for a December Rate Hike
by Richard Clarida of PIMCO, 11/2/17

One could argue that this latest statement came in on the dovish side. But a broader read rapidly dispels that notion.

The Global Factor in Neutral Policy Rates
by Richard Clarida of PIMCO, 10/26/17

A global factor helps explain why central bank policies often tend to be correlated across countries.

Fed Balance Sheet Normalization: Signed, Sealed, Delevered
by Richard Clarida of PIMCO, 9/21/17

Going into today’s important Federal Reserve meeting (with a press conference and an update to the economic projections, aka the “dot plot,” along with the usual statement), we at PIMCO along with most market participants expected the Fed to announce formally the start of balance sheet reduction this fall, perhaps in October. And that’s exactly what the Federal Open Market Committee (FOMC) did.

Yellen at Jackson Hole: Long on History, Short on Hints About Future Fed Policy
by Richard Clarida of PIMCO, 8/28/17

Federal Reserve Chair Janet Yellen’s remarks at the annual Jackson Hole Economic Policy Symposium delved into history but offered few clues about the future course of Fed policy.

Fed Balance Sheet Tapering: We Gotta Have Faith
by Richard Clarida of PIMCO, 8/18/17

The news coming out of the July Federal Open Market Committee (FOMC) meeting was a reference in the statement that the Federal Reserve expected to begin to implement its balance sheet normalization program “relatively soon,” which we (along with many market participants) took to mean at the upcoming September meeting.

The Fed Balance Sheet and the Taper Tantrum That Ain’t (Yet)
by Richard Clarida of PIMCO, 7/19/17

The Federal Reserve is likely to begin normalizing its balance sheet in 2017. Why hasn’t this news rattled the bond market?

Fed Minutes: Mission Accomplished on Rates, But Questions Remain on Balance Sheet Plan
by Richard Clarida of PIMCO, 7/6/17

The Federal Reserve hiked rates as expected at its meeting on 13–14 June 2017, and it made news by providing important details about its plans to normalize its balance sheet. However, one crucial detail the Fed did not provide: when it will commence that process of balance sheet normalization.

2017 Secular Outlook: Pivot Points
by Richard Clarida, Andrew Balls and Daniel Ivascyn of PIMCO, 5/31/17

With the probability of recession sometime in the next five years around 70% in our view, now may be a critical time to prepare for when the cyclical tailwind that began last year begins to fade. Over the next five years, the global economy may undergo five significant pivots in the direction and scope of monetary, fiscal, trade, geopolitical and exchange rate policies. Are investors too optimistic about the future economy? We address this and other crucial questions in PIMCO’s 2017 Secular Outlook – our long-term view for the global economy and markets. 

Fed Minutes: Cap and Trade
by Richard Clarida of PIMCO, 5/26/17

The minutes of the May Federal Open Market Committee (FOMC) meeting, released Wednesday, provided (as expected) more information on the committee’s thinking about how and when to start the policy of normalizing the size of the Federal Reserve’s balance sheet.

The Fed’s Balance Sheet: Some Insights in March Minutes, But Questions Remain
by Richard Clarida of PIMCO, 4/6/17

The way in which the Fed normalizes its balance sheet will have important implications for markets.

Removing Accommodation
by Richard Clarida of PIMCO, 3/31/17

The Federal Reserve faces three complications to removing monetary policy accommodation.

Fed on Inflation: ‘Stabilize’ … ‘Sustained’ … ‘Symmetric’
by Richard Clarida of PIMCO, 3/16/17

Although there was no drama in the Federal Reserve’s decision today to remove 25 basis points of accommodation (also known as a policy rate hike), there was a surprising – and laudable – amount of substance in the changes to the accompanying Fed statement.

Fed Minutes: ‘Fairly Soon’
by Richard Clarida of PIMCO, 2/23/17

With Federal Reserve Chair Janet Yellen on Capitol Hill for two days of testimony last week, plus Vice Chairman Stanley Fischer’s interview on Bloomberg TV, plus the upside surprise on U.S. CPI inflation data released on 15 February, the minutes...

Fed Minutes: Tilting More Hawkish
by Richard Clarida of PIMCO, 1/6/17

Many had not expected the minutes of the 14 December 2016 Federal Reserve meeting released this afternoon to make much news.

The Fed Is Staring at a Nasty Rate Dilemma in 2017
by Richard Clarida of PIMCO, 12/22/16

Policymakers may have to juggle a rising dollar, higher yields and a lag in any Trump stimulus.

The Fed: Betting on Trumponomics
by Richard Clarida of PIMCO, 12/15/16

While most observers had expected correctly that the Federal Reserve would hike interest rates by 25 basis points today – markets had priced in literally a 100% chance – they did not think the Federal Open Market Committee (FOMC) would materially change its September projection for two hikes in 2017.

Fed Minutes and the Election: The Case for December Grows Stronger
by Richard Clarida of PIMCO, 11/30/16

The minutes reveal a committee that had expected to hike at the meeting on December 13-14. Developments since could only have strengthened the case.

Fed Statement: No Waves, December Hike Still Likely
by Richard Clarida of PIMCO, 11/3/16

Last month, when the minutes from the Federal Open Market Committee (FOMC) meeting in September were released, they revealed that the decision not to hike the policy rate was a close call.

Fed Statement: Let the Dots – and the Dissents – Do the Talking
by Richard Clarida of PIMCO, 9/23/16
Going into today’s Federal Open Market Committee (FOMC) meeting, the question was in what way – or ways – the statement and the accompanying Summary of Economic Projections (SEP) would signal the committee’s conviction that it expects to hike rates later this year.

National Monetary Policies Often Correlate, Sometimes Coordinate, Rarely Cooperate
by Richard Clarida of PIMCO, 7/13/16
International monetary policy cooperation could pose a threat to the credibility and public support.

The Global Outlook: Stable But Not Secure
by Andrew Balls, Richard Clarida, Daniel Ivascyn of PIMCO, 6/2/16
Good investment opportunities remain, but investors must be compensated for growing and heightened uncertainty and risks of policy exhaustion.

Wages Are Rising: Good News for Workers, the Economy … and the Fed
by Richard Clarida of PIMCO, 4/1/16
The recovery from the Great Recession of 2007–2009 has returned to the pattern of past cycles in which labor’s share of national income begins to rise. A challenge the Fed will face as it tries to engineer a “dovish” rate hike cycle is that investors, households and firms tend to associate Fed rate hike cycles with Fed efforts to reduce or limit inflation. But the Fed wants higher inflation from today’s levels, so it will not be inclined to run a hawkish policy that would prevent it. In the Fed’s current model, holding constant expected inflation, the only way to get inflation moving up to its 2% target is for the unemployment rate to be pushed below NAIRU (the non-accelerating inflation rate of unemployment).

Plodding Along? A Discussion of Today’s Global Economy
by Richard Clarida, Joachim Fels of PIMCO, 12/2/15
This year has seen the global economy continue along a path of modest overall trend growth, but the path has been anything but clear, due to the complexities of oil prices, central bank policies and developments in China. In this interview, Richard Clarida, global strategic advisor, and Joachim Fels, global economic advisor, discuss essential questions surrounding the world’s major economies.

r*=New Neutral
by Richard Clarida of PIMCO, 11/24/15
The Federal Reserve’s baseline view of a rate-hike trajectory is consistent with PIMCO’s New Neutral thesis about the neutral policy rate.

Gaps, Growth and Headwinds
by Richard Clarida of PIMCO, 10/14/15
Global growth is uninspiring. The global economy plods along with aggregate GDP growth of around 3 per cent to 3.5 per cent and similar levels of inflation. This has been true for the past several years and many expect it to continue for at least the next couple. This is partly because trend growth rates in major economies appear to have slowed from the pre-crisis pace. But slow growth is not just a supply-side condition.

Balancing Risks and Opportunities in the Multi-Speed World
by Richard Clarida, Andrew Balls of PIMCO, 9/23/15
Read our global economic outlook for the near term and implications for asset classes.

Data Dependence Is Not a Monetary Policy, But Are the Dots?
by Richard Clarida of PIMCO, 7/1/15
At its June meeting, the Fed emphasized data dependence in setting monetary policy. Although a data-dependent Fed is one that appears to retain a great deal of optionality on the timing and pace of future rate moves, data dependence itself is not a monetary policy. The Fed’s reaction function to evolving data will likely determine the path of policy normalization. The “dot plot” provides some insight, but the dots alone don’t tell us how policy will play out if the macro data evolve differently from the baseline.

Riding a Wave of Accommodation
by Richard Clarida, Andrew Balls of PIMCO, 3/19/15
PIMCO’s quarterly Cyclical Forum was held earlier this month to evaluate and assess the state of the global economy, to reach consensus on the near-term macroeconomic outlook, and to explore the tail risks to that outlook.

Share and Share Alike??
by Richard Clarida of PIMCO, 8/19/14
Labor compensation as a share of national income fell sharply in 20092010 and has remained depressed: The share of national income at the end of 2013 was the smallest slice paid to labor in at least 60 years! During the last three U.S. business cycles, the rise in labors share that commenced during the expansion phase of the business cycle was not accompanied by a material rise in PCE inflation.

Is It Time for the Fed to ?Level? With Markets?
by Richard Clarida of PIMCO, 2/26/14
If unemployment continues to diminish and quantitative easing tapers to its expected conclusion, the Federal Reserve will likely feel compelled ? if not by consensus, then by markets ? to refine the forward guidance that it provides to the public today. With inflation running below 2%, the Fed may consider a price level target, together with more holistic measures of the state of the labor market, as a replacement for the unemployment threshold in offering guidance on the future pace of policy normalization.

Guidance Counselors
by Richard Clarida, Saumil Parikh of PIMCO, 11/22/13
Forward guidance is an explicit communication by a central bank that provides information today about the timing for specific policy tools in the future. There are at least three types of forward guidance: calendar-based, outcome-based and optimal control. Since 2011 the Fed has deployed both calendar-based and outcome-based guidance. We expect the Yellen Fed to enhance the current outcome-based guidance to convey more information about the timing and pace of policy moves.

Reflation in the Balance
by Richard Clarida of PIMCO, 5/30/13
Four of the worlds major central banks are now all in when it comes to ballooning their balance sheets in correlated, if not coordinated, efforts to achieve escape velocity in their economies. In accounting for the impact of quantitative easing on two key balance sheets, we are able to interpret, monitor and calibrate the programs currently in place. This in turn can help us prepare portfolios if or when sentiments and inflation expectations shift.

Whatever It Takes in Japan? It Takes an 'Audacious' Monetary Policy!
by Richard Clarida and Tomoya Masanao of PIMCO, 3/28/13
The BOJ will have to make some key monetary policy decisions soon, given Kurodas sincere but ambitious desire to achieve 2% inflation within two years. The BOJ has lagged far behind other major central banks in the deployment of its balance sheet since the onset of the financial crisis. Expect Japans monetary policy to be more aggressive and experimental as it shifts toward reflating the economy. For global investors, this may mean a modest economic growth contribution from Japan, at least over a cyclical horizon, as well as additional central bank liquidity pouring into global m

The Bank of Canada Has Barked, But Will It Bite?
by Ed Devlin and Richard Clarida of PIMCO, 12/1/12
As Canadian consumers have increased their mortgage debt and bid up housing prices, the potential for a disorderly unwinding of these imbalances rightly concerns the Bank of Canada. PIMCO believes that the banks next policy move will be to raise interest rates, but with the traditional aim of fighting inflation rather than reducing home prices and consumer debt. We expect the Bank of Canada to continue tightening mortgage credit and using moral suasion to damp the housing boom and discourage consumers from taking on more debt.

Level Best
by Richard Clarida of PIMCO, 7/9/12
Craving instant information gratification, many of us spend much time trying to forecast and analyze short-term changes in economic data. Looking at the trends in the levels of economic data over a period of five to seven years provides refreshing insight and perspective on the economy that are often distorted by the daily data noise. Specifically, trends in the Consumer Price Index, the U.S. Dollar Index and real GDP reveal important insights about the economy, markets and policy.
Results 1–50 of 54 found.