Asks if he'd look through higher oil prices if at Fed today.
Francine Lacqua
Richard Clarida
First inclination is to look through, but Fed is cognizant of five years of too-high inflation, so not relaxed.
Richard Clarida
Conflict pushes up prices (Fed doesn't like) but also slows activity, pushes up unemployment (Fed doesn't like). Balancing act. Thinks underlying inflation trend is down, but will watch data.
Asks about market pricing Fed cuts but not ECB cuts.
Francine Lacqua
Richard Clarida
Reflects communication. ECB got inflation to target; Fed still has way to go but communicating differently via dots/rhetoric.
Asks impact on US economy.
Francine Lacqua
Richard Clarida
Longer it goes, more negative consequences. US imports energy-content goods, erodes paychecks, slows economy despite AI capex boom.
Asks what is priced in.
Francine Lacqua
Richard Clarida
Oil futures ~$70 a year out, so oil investors think it ends quickly. But that's just a guess.
Asks about private credit shakeout.
Francine Lacqua
Richard Clarida
Potentially. Market grown to $2T, not tested in downturn. PIMCO sees opportunities but investors must do homework. Focus on asset-backed lending (data centers, aircraft) vs. direct lending to PE.
Richard Clarida
On dollar: Has not lost its role in turmoil. Will continue as global reserve currency.