Fed Needs Clear Inflation Target and Messaging, Clarida Says

• The 30-year bond yield reached a 19-year high of 5.26%, indicating a bond market sell-off.
• Clarida emphasizes the importance of the Fed having a clear inflation target, noting that current measures of inflation are at or below previous levels.
• He discusses the 'Hall of Mirrors' problem where the Fed and markets influence each other, and the growing divergence of the K-shaped economy, with asset owners doing well and others struggling.

Former Federal Reserve Vice Chairman Richard Clarida discusses the bond market's reaction to Fed policy, emphasizing the need for clear inflation targets and acknowledging the 'Hall of Mirrors' problem in central banking. He highlights the increased divergence in the K-shaped economy, where asset owners thrive while others struggle, and suggests the Fed needs to address these big-picture questions.