Macro Hive Conversations With Bilal Hafeez
Macro Hive Conversations With Bilal Hafeez

Ep. 368: Richard Clarida on the Warsh Fed, the AI Capex Boom, and Global Economic Fragmentation

July 24, 2026

AI Summary

5 min read

“I get tired of all the analogies to the 1970s in the U.S.,” says Richard Clarida, the former Fed vice chair now at PIMCO. He was a college student in the 1970s, and he remembers the difference: back then, you had double-digit price inflation and double-digit wage inflation—a genuine cost-push spiral. Today, wage inflation adjusted for productivity is running exactly where it was in 2018–2019. The labor market is simply not a driver of price inflation right now, no matter how many 1970s comparisons you read. That distinction is the backbone of Clarida’s reading of the current macro landscape, which he lays out in a conversation that covers the resilience of the global economy in 2025, the unusual dynamics of the AI capex boom, the Warsh Fed’s emerging playbook, and the deeper fragmentation reshaping the world order.

The 2025 economy was more resilient than the headlines admitted

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What you'll learn

  • 1 (01:20) **Guest Introduction & Origin Story** - Richard Clarida's background growing up in a coal mining town, studying economics at University of Illinois and Harvard, and his path to PIMCO and the Fed.
  • 2 (02:33) **US Economic Resilience in 2025** - Clarida argues the resilience of the US and global economy in 2025 was largely ignored by the financial press, especially after Liberation Day tariffs.
  • 3 (04:38) **The Labor Market Puzzle** - Why employment growth collapsed last year but wage inflation didn't spike, and why the Fed cut rates despite inflation being above target.
  • 4 (06:12) **Why This Cycle is Not the 1970s** - Clarida pushes back on the 1970s analogies, highlighting the absence of a wage-price spiral.
  • 5 (07:31) **Why Aren't Wages Growing Faster?** - Despite low unemployment and reduced labor supply, wage growth remains subdued.
  • 6 (08:43) **The Labor Share of Income Is at a Record Low** - Clarida confirms that profits are surging while workers' share of national income is at an 80-year low.
  • 7 (10:20) **Inflation: The Recent Soft Print and the Stubborn Stickiness** - Analysis of the latest CPI and PPI data, and why inflation has been so hard to push back down to 2%.

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Show Notes

Dr Clarida is a managing director and global economic advisor at PIMCO. Prior to rejoining PIMCO in 2022, he was the firm's global strategic advisor from 2006 to 2018. He served as Vice Chairman of the Board of Governors of the U.S. Federal Reserve System from September 2018 to January 2022. Richard is also Professor of Economics and International Affairs at Columbia University. Before joining PIMCO in 2006, he was Assistant Secretary of the Treasury for Economic Policy, in which he served as chief economic advisor to two U.S. Treasury Secretaries. Earlier in his career, he was with Credit Suisse and Grossman Asset Management. He has 26 years of investment experience and holds a PhD and a master's degree in economics from Harvard University. He received an undergraduate degree with Bronze Tablet Honors from the University of Illinois. In this podcast, we discuss:

  1. Clarida's Macro Origin Story
  2. Global Economic Resilience
  3. The AI Capex Boom
  4. Labour's Declining Income Share
  5. The "Warsh Fed" Doctrine
  6. Revisiting Forward Guidance
  7. AI's Impact on Productivity and R-star
  8. The Era of Global Fragmentation
  9. Optimism for the Next Generation
Macro Hive Conversations With Bilal Hafeez

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