Former Fed Vice Chairman Warns: Anti-Inflation Efforts Are Not Over, Fed May No Longer Forecast Two Rate Cuts

ChainCatcher news, former Federal Reserve Vice Chairman and current PIMCO advisor Richard Clarida stated that although U.S. inflation performed better than expected at the beginning of the year, subsequent pressures remain significant due to pre-stocking and accumulated tariffs.

He pointed out that the average effective tariff rate in the U.S. rose to 15.6% in June, the highest since 1937, which could push inflation back above 3%. Clarida questioned whether the Federal Reserve would still maintain its forecast of two rate cuts this year and emphasized that if the market doubts the new chairman's independence, both the stock and bond markets will react sharply. He believes that the 10-year U.S. Treasury yield has already shown signs of a "bond vigilante" return.