Rich Clarida on Navigating Monetary Policy in Choppy Waters

**David Beckworth** (0:02)
Welcome to Macro Musings, where each week we pull back the curtain and take a closer look at the most important macroeconomic issues of the past, present, and future. I am your host, David Beckworth, a senior research fellow with the Mercatus Center at George Mason University. I'm glad you decided to join us.
Our guest today is Rich Clarida. Rich is a well-known academic, and from 2018 to 2022, he was the vice chair of the Board of Governors of the Federal Reserve System. He is currently a professor of economics at Columbia University, and a manager director at Pimco. Rich joins us today to help us navigate and think through the challenges that lie ahead for the Fed in these turbulent times. Rich, welcome back to the program.

**Rich Clarida** (0:50)
I'm looking forward to it. Let's go.

**David Beckworth** (0:53)
Let's do it. Now, we were talking before the show got started, how you've actually been a part of this podcast in some form since its inception. So I want to tell the story to the listeners and to you, Rich. So I actually started the podcast back in 2016, so a decade ago.

**Rich Clarida** (1:09)
Congratulations.

**David Beckworth** (1:11)
Well, thank you. Yeah, you're like episode 540 I forget the exact number. But one of the first guests was John Taylor. So I worked for him at the US Department of Treasury.
And many years later, we start the podcast and he comes on. He had a great time. He had such a great time, Rich, that he invited me to present a paper at his Hoover Monetary Policy Conference back in 2016
So I presented a paper that was, it was a co-authored paper. It's kind of an update paper of the Helen Ray, Pierre-Olivier Gorinchaus paper that looked at the US as a hedge fund to the world or a banker to the world. And during the Q&A, you spoke up. You're one of the first person that spoke up. You said, I commissioned that paper. And I'm glad that you updated the data. And then that evening, we set together at supper, because they kind of do your range seeding. They kind of randomly do it. So they mix people up. Had a great conversation. So I got to know you at Hoover via John Taylor, right? Because of the podcast. Now, a few years later, it's 2018, and we're at a Cato Monetary Policy Conference. And I see you and you're now the vice chair of the Fed. I'm thinking, man, I wonder if Rich remembers me.
And so you give your talk. So I'm thinking, what am I going to say to Rich? I got to go shake his hand. I got to get his attention somehow. And Rich, you come up to me, you say, David, you got a podcast. And you've been listening to the show. Do you remember that?

**Rich Clarida** (2:36)
Yeah, I know. I do remember that. I mean, not the exact quote, but I remember the conference and connecting there for sure.

**David Beckworth** (2:43)
Yeah.
And then of course, you're a vice chair of the Fed for a number of years. And finally, in 24, we get you on the program. Had a great conversation about fates, about R-Star, about inflation targeting, about your history. In fact, Rich, we talked a lot about your music career, and we did a bonus episode. Do you remember that?

**Rich Clarida** (3:01)
I do. Thank you for the plug. Yeah.

**David Beckworth** (3:04)
Now, you had another album coming out. So we talked about your first album, Time No Change, and you mentioned you were working on a second album. Is that one released now?

**Rich Clarida** (3:14)
Well, it is not. It's sort of like every year I say it's going to be ready next year, but this time I really meant mean it. It will be out in 2026 It may be closer to December than April, but it's on the home stretch. Yeah.

**David Beckworth** (3:28)
Yeah. So I encourage listeners to go back and check out both his first episode as well as his bonus episode. Now, your first album had like 13 songs on it, and your second one is nine or 10 Is that right?

**Rich Clarida** (3:40)
It will be at eight plus some bonus tracks. Yeah.

**David Beckworth** (3:43)
Okay. Okay. That's so amazing. I mean, Rich, the famous economist, the monetary economist, also the musician. So we look forward to listening to your tunes coming forward. So everyone, not only check out his podcast, but check out his albums as they become available. All right. So Rich, we're not here to talk about music, as much fun as that is. We're here to talk about the Federal Reserve and what's happening. And I want to begin first with what's been happening to inflation. You know, for a number of years now, inflation has been above the targeted 2%.