Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Could Gold Price Reach $7,000 by 2030? - 6th Aug 20
Bananas for All! Keep Dancing… FOMC - 6th Aug 20
How to Do Bets During This Time - 6th Aug 20
How to develop your stock trading strategy - 6th Aug 20
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
ARE YOU LOVING YOUR SERVITUDE? - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

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