Charting the Business Cycle With Richard Clarida
Macro instability drives consensus views on weaker growth, higher inflation
Policy choices are roiling markets and shaking confidence among consumers and businesses.
The consensus outlook for G-10 developed economies has shifted sharply toward lower growth—or even contraction—amid significant inflationary pressure.
Is a widespread bout of stagflation on the horizon? And how can central banks manage the competing risks to growth, employment, and price stability?
Consensus Growth vs. Inflation
Foreign investors’ share of U.S. debt could decline further
To compound stagflation concerns, U.S. Treasury issues have not been absorbed at the same pace by foreign investors since 2014.
This long-term trend could be further exacerbated by countries that face recent tariff announcements while holding large amounts of Treasuries—uncertainty could subject foreign investors to further slow or cease buying Treasuries.
Foreign Holdings of U.S. Treasury Securities as a Share of Outstanding Public Debt
U.S. labor productivity appears resilient amid stagflationary pressure
Even so, unlike the stagflation period of the 1970s that saw a large drop in U.S. labor productivity partly attributed to the energy crisis, U.S. labor productivity has held up fairly well.
Looking ahead, productive labor markets could help balance—to some degree—the inflationary pressures and trade-related uncertainty likely to hinder U.S. economic growth and activity.
U.S. Labor Output Per Hour Growth
Other Editions
Former Federal Reserve Vice Chair Richard Clarida charts key signals for interest rates and the economy – and what they could mean for investors.
Greg Sharenow, managing director and portfolio manager, charts the continued resilience of commodities and their low correlation with stocks and bonds amid recent geopolitical shocks, underscoring their strength as portfolio diversifiers.
Explore insights on the neutral rate and rising term premium, highlighting the impact on U.S. Treasury Yields, risk compensation, and strategic duration positioning with market and economic charts.
Charting Public Debt With Peder Beck-Friis
Peder Beck-Friis, an economist at PIMCO, charts rising government debt and its implications for the U.S. dollar and longer-term Treasury yields.
Kristofer Kraus, portfolio manager and co-lead of PIMCO’s asset-based finance business, charts the nuances behind the overall resilience of U.S. consumers – and explains how these insights shape lending and investment strategies.
Charting Public Credit With Mohit Mittal
Explore public credit markets charts from PIMCO expert Mohit Mittal that shows how public corporate credit has remained highly liquid and shown narrow bid-ask spread during recent market volatility.
Featured Participants
Disclosures
Past performance is not a guarantee or a reliable indicator of future results.
Investing in the bond market is subject to risks, including market, interest rate, issuer, credit, inflation risk, and liquidity risk. The value of most bonds and bond strategies are impacted by changes in interest rates. Bonds and bond strategies with longer durations tend to be more sensitive and volatile than those with shorter durations; bond prices generally fall as interest rates rise, and low interest rate environments increase this risk. Reductions in bond counterparty capacity may contribute to decreased market liquidity and increased price volatility. Bond investments may be worth more or less than the original cost when redeemed.
Statements concerning financial market trends or portfolio strategies are based on current market conditions, which will fluctuate. There is no guarantee that these investment strategies will work under all market conditions or are appropriate for all investors and each investor should evaluate their ability to invest for the long term, especially during periods of downturn in the market. Outlook and strategies are subject to change without notice.
Performance results for certain charts and graphs may be limited by date ranges specified on those charts and graphs; different time periods may produce different results.
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