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Richard Clarida, a former Federal Reserve vice chairman and current global economic advisor at PIMCO, gave his perspective on the US interest rate outlook, saying that “a cut in March, or at least a strong signal of imminent cuts at that meeting it would make sense.”
At the same time, Clarida stressed that economic dynamics could change. A faster slowdown in inflation could herald the prospect of rate cuts, while stubborn price pressures could delay them later in the year or even beyond.
Clarida’s remarks feed into the debate about when the Fed will ease monetary policy and the outlook for the US economy. Swap markets are for sure another 25bp rate hike this month, while the first 25bp cut is seen as likely by the end of March.