Bloomberg Talks
PIMCO Global Economic Advisor Richard Clarida Talks US Inflation, Economy
23 Jan 2026
Chapter 1: What is the main topic discussed in this episode?
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Bloomberg Audio Studios. Podcasts. Radio. News. Let's bring in Rich Clarida. He is Global Economic Advisor at PIMCO. He is also a former Federal Reserve Vice Chairman. Rich, always a pleasure to speak with you. Give us your read on the U.S. economy right now, because the economic data seem to suggest that it's holding on pretty well.
It's solid, and the labor market is also not deteriorating, even as inflation seems like it's on the right path.
Well, hi, Scarlett. Yes, as we used to say during my time at the Fed, the U.S. economy is in a good place, and it is. It's been remarkably resilient. Growth for 2025 will probably come in north of 2%, finishing strong. Inflation has been basically flat. It did not really move up as a result of the tariffs. We've had strong capital spending in the tech sector.
Now, in 2026, you've got the big, beautiful bill, which is providing a fiscal impulse. You've got commitments from foreign countries and companies to invest in the U.S. And obviously, the capital spending boom in the tech sector continues. And so, indeed, I think you summarized it well. The economy is in a pretty good place. Okay.
It's in a pretty good place, certainly based on the headline economic indicators. Yet, when you look at the anecdotal, and here I'm referring to commentary from airlines to P&G to 3M, so far this earnings season, a lot of it's focused on uncertainty, on caution, on what they're calling low consumer confidence.
Rich, how much do you read into this downbeat commentary from companies on the front line?
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Chapter 2: What insights does Richard Clarida provide about the current state of the US economy?
And we can handle that. The Fed is an independent body. Different leadership styles are to be expected, and we've seen success from different ones. I'm not quite sure what President Trump is looking for in the new one, but we do know that he very much values loyalty, and that's probably part of the decision.
Rich, how do you size up the remaining front-running candidates, and how do you think President Trump is going to size them up?
Well, of course, only President Trump knows where he's going to land. What I would say is I know all of them well. It does appear as though Kevin Hassett and the president have decided that perhaps his best role is to stay as the National Economic Council director, so that leaves... Governor Waller, Kevin Warsh, and Rick Reeder. I know each of them well.
I think each of them would be an effective Fed chair, but they bring different strengths and backgrounds to the role.
Chapter 3: How is inflation affecting the US economy according to Richard Clarida?
Chris Waller is a world-class macroeconomist. He's also a good forecaster and good communicator. In the case of Kevin Warsh, Kevin Warsh was a Fed governor. He's had very thoughtful and interesting things to say about changing the Fed as an institution and in particular thoughts on the balance sheet.
And then finally, Rick Reeder is a very respected legendary investor in financial markets and obviously would bring a lot of connectivity to the bond market. market. So all three bring something a lot to the table. It's really going to be the call of President Trump, and we'll see where he ends up.
At this point, would any of those picks surprise the bond market?
I think right now it's pretty even in the betting odds. I guess right now what would be a surprise, there would be two surprises. One would be if Kevin Hassett decides and the president decides they do want him at the Fed after a week ago saying no. And then, of course, there is some probability that Scott Besant does it. He would obviously be an excellent candidate. and very effective choice.
But again, they've indicated that the president wants Secretary Besson to stay at the treasury. But I think among the other three, probably right now, the odds of Waller are a bit lower simply because he doesn't seem to have that connectivity to either the president or the treasury secretary.
And of course, personnel is policy when it comes to the Federal Reserve, which is why the president is so intent on changing the folks there. The Supreme Court this week heard arguments in the Lisa Cook case for the governor. They gave no ruling, but the justices do appear to be weary of President Trump's effort to fire her.
What would, I mean, do you expect any kind of change in the board of the Fed based on the Lisa Cook hearing? Or is it safe to say that she'll be in place through the first half of the year?
Oh, again, not a legal expert. I just do economics, but I talk to them. And my sense from all the reporting, including by Bloomberg, is that the justices, both the more liberal and more conservative justices, seem skeptical of the White House argument that it had met the standard of a four-cause removal.
I think there's a very high likelihood that Lisa Cook will continue in this role throughout certainly much, if not all, of this year. Legal scholars seem to think that one likely scenario is that the Supreme Court merely rules narrowly that she cannot be removed and bump it back down to the lower courts to finally
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Chapter 4: What are the implications of recent corporate earnings reports on consumer confidence?
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