Pimco's Clarida Finds Inflation Risk Mispriced by Markets

The transcript discusses the mispricing of inflation risk and the attractiveness of current market valuations. It explores the steepening of the yield curve, influenced by both technical and fundamental factors, including inflation risk and reduced concerns about China's economy. The global bond market dynamics are examined, highlighting the lack of term premium and the impact of monetary policy on financial intermediation. The discussion also covers the effects of negative rates on banks and savings, and anticipates modest fiscal stimulus in the US, Japan, and Europe.

What is the market's current expectation for the Fed's inflation target over the next 10 years?

• Below 2%

• Between 2% and 3%

• Exactly 2%

• Above 3%

What is one of the technical factors mentioned that influences the steepening of the yield curve?

• Federal Reserve policies

• Chinese economic growth

• Bank of Japan's actions

• European Central Bank's decisions

How have negative interest rates impacted financial intermediation in Japan?

• Increased bank profitability

• Decreased bank profitability

• Improved financial intermediation

• No impact on bank profitability

Which region is more affected by the flat yield curve due to its reliance on bank finance?

• United States

• Japan and Europe

• Africa

• South America

What has been the trend in personal savings rates in the US since the financial crisis?

• Decreased significantly

• Remained at zero

• Increased and remained elevated

• Fluctuated without a clear trend

What is the expected fiscal policy trend in the US for the next year?

• No change in fiscal policy

• Increased austerity measures

• Modest fiscal stimulus

• Significant tax cuts

What is the primary reason for the elevated savings rate in the US?

• Low inflation rates

• Government incentives

• Upper income distribution saving more

• High interest rates