Charting the Business Cycle With Richard Clarida
Former Federal Reserve Vice Chair Richard Clarida shares three charts highlighting possible macro inflection points in the business cycle: from growth and inflation to debt and labor.
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
Data as of April 2025. Source: Bloomberg, PIMCO. Bloomberg consensus is the average of surveyed participants on their forecasts for G10 GDP Annual (YoY%) and G10 CPI Inflation (YoY%).
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
Data as of April 2025. Source: Haver Analytics, Bloomberg, US Treasury, Federal Reserve, PIMCO. Refer to Appendix for additional outlook and risk information.
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