Pimco's Clarida Says Fed Could 'Ratchet Down Rates' Next Year

The transcript discusses Powell's projection of achieving 2% core inflation by 2025 and the possibility of rate cuts next year, even if inflation remains above target. Pemco's baseline view suggests that inflation could fall below 3% next year, prompting the Fed to reduce rates. The discussion highlights the Fed's data-dependent approach, similar to other central banks.

What is Powell's prediction for US core inflation by 2025?

• 4% core inflation

• 3% core inflation

• 2% core inflation

• 1% core inflation

According to Pemco, what is the expected inflation rate next year?

• Above 4%

• Exactly 3%

• Exactly 2%

• Below 3%

What does Pemco refer to as the 'two point something destination'?

• Inflation falling below 3%

• Inflation stabilizing at 5%

• Inflation reaching exactly 2%

• Inflation remaining above 4%

How does the Fed plan to approach interest rate decisions?

• By ignoring inflation rates

• By copying the ECB's decisions

• By being data-dependent

• By following a fixed schedule

What might the Fed do even if inflation is above 2%?

• Increase interest rates

• Ignore inflation data

• Maintain current rates

• Cut interest rates