Pimco’s Clarida Says ‘Bar Is High’ for a Fed Rate Hike

Pimco global economic advisor and former Fed vice chair Richard Clarida said an ECB interest-rate hike is "not a slam dunk, but it’s an option," signaling that European tightening remains possible but uncertain. He added the bar is high for a Fed rate hike, implying U.S. policymakers are likely to wait for stronger economic data before moving, which lowers the near-term probability of Fed tightening and keeps rate-driven market volatility muted.

Analysis

Pimco global economic advisor and former Fed vice chair Richard Clarida said an ECB interest-rate hike is "not a slam dunk, but it’s an option," signaling that European tightening remains possible but uncertain. He added the bar is high for a Fed rate hike, implying U.S. policymakers are likely to wait for stronger economic data before moving, which lowers the near-term probability of Fed tightening and keeps rate-driven market volatility muted.