Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Coronavirus China Infection Statistics Analysis, Probability Forecasts 1/2 Million Infected - 21st Feb 20
Is Crude Oil Firmly on the Upswing Now? - 20th Feb 20
What Can Stop the Stocks Bull – Or At Least, Make It Pause? - 20th Feb 20
Trump and Economic News That Drive Gold, Not Just Coronavirus - 20th Feb 20
Coronavirus COVID19 UK Infection Prevention, Boosting Immune Systems, Birmingham, Sheffield - 20th Feb 20
Silver’s Valuable Insights Into the Upcoming PMs Rally - 20th Feb 20
Coronavirus Coming Storm Act Now to Protect Yourselves and Family to Survive COVID-19 Pandemic - 19th Feb 20
Future Silver Prices Will Shock People, and They’ll Kick Themselves for Not Buying Under $20… - 19th Feb 20
What Alexis Kennedy Learned from Launching Cultist Simulator - 19th Feb 20
Stock Market Potential Short-term top - 18th Feb 20
Coronavirus Fourth Turning - No One Gets Out Of Here Alive! - 18th Feb 20
The Stocks Hit Worst From the Coronavirus - 18th Feb 20
Tips on Pest Control: How to Prevent Pests and Rodents - 18th Feb 20
Buying a Custom Built Gaming PC From Overclockers.co.uk - 1. Delivery and Unboxing - 17th Feb 20
BAIDU (BIDU) Illustrates Why You Should NOT Invest in Chinese Stocks - 17th Feb 20
Financial Markets News Report: February 17, 2020 - February 21, 2020 - 17th Feb 20
NVIDIA (NVDA) GPU King For AI Mega-trend Tech Stocks Investing 2020 - 17th Feb 20
Stock Market Bubble - No One Gets Out Of Here Alive! - 17th Feb 20
British Pound GBP Trend Forecast 2020 - 16th Feb 20
SAMSUNG AI Mega-trend Tech Stocks Investing 2020 - 16th Feb 20
Ignore the Polls, the Markets Have Already Told You Who Wins in 2020 - 16th Feb 20
UK Coronavirus COVID-19 Pandemic WARNING! Sheffield, Manchester, Birmingham Outbreaks Probable - 16th Feb 20
iShares Nasdaq Biotechnology ETF IBB AI Mega-trend Tech Stocks Investing 2020 - 15th Feb 20
Gold Stocks Still Stalled - 15th Feb 20
Is The Technology Stocks Sector Setting Up For A Crash? - 15th Feb 20
UK Calm Before Corona Virus Storm - Infections Forecast into End March 2020 - 15th Feb 20
The Growing Weaponization of Space - 14th Feb 20
Will the 2020s Be Good or Bad for the Gold Market? - 14th Feb 20
Predictive Modeling Suggests Gold Price Will Break Above $1650 Within 15~30 Days - 14th Feb 20
UK Coronavirus COVID-19 Infections and Deaths Trend Forecast 2020 - 14th Feb 20
Coronavirus, Powell and Gold - 14th Feb 20
How the Corona Virus is Affecting Global Stock Markets - 14th Feb 20
British Pound GBP Trend and Elliott Wave Analysis - 13th Feb 20
Owning and Driving a Land Rover Discovery Sport in 2020 - 2 YEAR Review - 13th Feb 20
Shipping Rates Plunge, Commodities and Stocks May Follow - 13th Feb 20
Powell says Fed will aggressively use QE to fight next recession - 13th Feb 20
PALLADIUM - THIS Is What a Run on the Bank for Precious Metals Looks Like… - 13th Feb 20
Bitcoin: "Is it too late to get in?" Get Answers Now - 13th Feb 20
China Coronavirus Infections Soar by 1/3rd to 60,000, Deaths Jump to 1,367 - 13th Feb 20
Crude Oil Price Action – Like a Coiled Spring Already? - 13th Feb 20
China Under Reporting Coronavirus COVID-19 Infections, Africa and South America Hidden Outbreaks - 12th Feb 20
Will USD X Decline About to Trigger Precious Metals Rally - 12th Feb 20
Copper Market is a Coiled Spring - 12th Feb 20
Dow Theory Stock Market Warning from the Utilities Index - 12th Feb 20
How to Get Virgin Media Engineers to FIX Hub 3.0 Problems and NOT BS Customers - 12th Feb 20
China Under Reporting Coronavirus COVID-19 Infections by 66% Due to Capacity Constraints - 12th Feb 20
Is Coronavirus the Black Swan That Takes Gold To-Da-Moon? - 12th Feb 20
Stock Market 2020 – A Close Look At What To Expect - 12th Feb 20
IBM AI Mega-trend Tech Stocks Investing 2020 - 11th Feb 20
The US Dollar’s Subtle Message for Gold - 11th Feb 20
What All To Do Before Opening A Bank Account For Your Business - 11th Feb 20
How and When to Enter Day Trades & Swing Trade For Maximum Gains - 11th Feb 20
The Great Stock Market Dichotomy - 11th Feb 20
Stock Market Sector Rotation Should Peak Within 60+ Days – Part II - 11th Feb 20
CoronaVirus Pandemic Stocks Bear Market Risk 2020? - Video - 11th Feb 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

PIMCO See's Slow Interest Rate Rise in 'New Neutral' - Video

Interest-Rates / US Interest Rates May 13, 2014 - 03:38 PM GMT

By: Bloomberg

Interest-Rates

Richard Clarida, global strategic adviser at Pacific Investment Management Co., talks about the outlook for the global economy and implications of the "new neutral." Clarida speaks with Bloomberg's Tom Keene, Scarlet Fu and Adam Johnson on Bloomberg Television's "Surveillance." James Lockhart, vice chairman of WL Ross & Co., also joined the discussion.


Clarida on how the 'New Neutral' is different from the 'New Normal':

"There are really three key elements. One we are in a multispeed world now of countries converging to slower trend growth rates. Number two it's a world in which these economies face an overhang of leverage so we really haven't had any deleveraging in the past five years in the aggregate with a lot of budget deficits. And number three policy makers can and will recognize that. They will keep rates lower for longer and when they start to hike the destination will be at a much lower rate than before."

On what was different without El-Erian:

"I've been at nine of these. This was the first that I had the pleasure to organize. I think the process has worked well for 35 years. The difference is there is a different set of issues on our plate than several years ago. We use the term 'robust and free-flowing discussion.' I can tell you it was a very robust and free-flowing. At the end of the three days we ended up with an organic sense of this thesis and we feel very comfortable with it."

On what the 'New Neutral' means for the Central Banks:

"What is means they will have to tread very carefully once they begin to hike and of course you have the ECB who is still in mode to ease, the BOJ that is still easing. Over the next three to five years the Fed and the Bank of England will start to hike rates and our view is they will start to hike them at very slow pace and they are not going to get those policy rates up to 4% as they expect and that is the 'new neutral'."

On whether bubbles are more likely to occur in the 'new neutral':

"In essence of monetary policy now, year 6 after the crisis is to keep the game going to keep the global economy growing at whatever pace it is, this going to require lower rates. I think policy makers in general feel the way to deal with excess and pockets in credit markets is a macro-prudential approach. Not by raising rates on everyone in the economy. I think going forward, and Janet Yellen said as Vice Chair said her preference was to not to hike to deal with bubbles but to use prudential tools so I think that will be the first course of action."

On PIMCO's take under the 'new neutral':

"Our take under the 'new neutral' is that the Fed is really focused now on inflation. And they are focused on actual inflation. The Fed's record of forecasting inflation hasn't been very good, neither is mine but they get paid to do it. Until we actually see inflation approaching the 2% target they will be very wary I think of pre-emptively hiking rates. We will be focusing on inflation late 2015 early 2016 for the first time."

On global slack:

"Of the world's major players, the US is in the best shape, we have had the most deleveraging, we have actually had the best policy to deal with the aftermath of the crisis and we're the closest to potential for the economy. If you look at Europe, the good news they are not in the mode of a crisis the bad news is they will grow at 1 and half percent this year. And if you look at China three and half years ago when I was doing this show they were growing at 12, then it was 9 now it was 7. We think it is going to be very tough even to keep growth in the 6% to 7% range because they have a huge shadow banking system. Globally there is slack... We think it is going to be very tough to have a 7 handle on China growth for the next five years... Our view on China is they have a really big problem with shadow banking but they have a huge wallet. They have the will. Our focus on China is really on the execution risk to limit the shadow banking system..."

Courtesy of Bloomberg Television

bloomberg.com

Copyright © 2014 Bloomberg - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Bloomberg Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules