Richard Clarida, former Federal Reserve Vice Chair and now an advisor at PIMCO, has raised alarms over the potential for accelerating inflation driven by increasing U.S. tariffs as of June.
With tariff levels climbing to their highest point since 1937, Clarida warns that inflation could surpass the 3% mark, posing a threat to the Fed’s current outlook on interest rate reductions.
Richard Clarida pointed to a notable surge in U.S. tariff rates; by June 2025, the average effective rate had risen to 15.6%, the highest since 1937. This sharp increase could drive inflation beyond the 3% threshold, potentially forcing the Federal Reserve to revisit its projection of two rate cuts this year.
The development has raised concerns in the financial markets about the Fed’s direction. Clarida questioned whether investors would continue to trust the independence of the newly appointed Fed chair, warning that both equities and bonds could face significant volatility.
“If confidence in the new chair’s independence erodes, we could see pronounced reactions across stock and bond markets,” said Richard Clarida, former Vice Chairman of the Federal Reserve and current PIMCO advisor.
This potential loss of credibility could trigger sharp swings in the financial landscape, fueled by growing uncertainty.
Did you know? The phrase “bond vigilantes”—referring to investors who sell off bonds to push yields higher in response to poor fiscal policies—rose to prominence during the 1980s. With inflationary pressures tied to rising tariffs, their impact may be making a comeback in today’s market environment.
According to CoinMarketCap, as of 03:44 UTC on June 18, 2025, Bitcoin (BTC) is worth $105,229.57 with a market value of $2.09 trillion. Over the past 24 hours, BTC has dropped 2.18%, with trading volume down 3.73%, although it still shows a 24.13% gain over the last 60 days—underscoring ongoing market volatility.
The Coincu research team notes that if inflation outpaces current projections, the Federal Reserve might reassess its monetary strategy, potentially delaying or modifying expected rate cuts. Such developments could heighten risk sensitivity across financial markets, including digital assets.
Additionally, regulatory moves—like the SEC’s stance on crypto ETFs—may play a crucial role in shaping investor sentiment. Meanwhile, major players such as Binance continue to expand operations through notable strategic investments, further influencing the broader crypto landscape.
From a technical standpoint, BNB continues to trade above a crucial upward-sloping trendline, with $625 serving as an essential support level. The immediate challenge is the $700 mark—breaking above it could trigger renewed bullish momentum. Conversely, failure to breach this resistance may result in a retracement toward the $625 range.
The Stochastic RSI, currently near 41.51, reflects a neutral stance, implying the market is in a wait-and-see mode, anticipating a definitive trigger for its next direction.
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