Fed May Need to Raise Rates Further to Fight Inflation, Says Former Vice Chair, Despite Economic Strength

Fed may still need to raise rates further to combat stubborn inflation despite strong economy, says former Fed vice chair Richard Clarida.

Inflation progress has stalled since summer, not seeing labor market slack yet.

Investors dialing back rate hike bets, but markets pricing in still some chance of further tightening.

Higher yields reflect bond supply, end of QE, and Fed's higher-for-longer message.

Bigger challenge may be knowing when to start cutting rates if inflation remains sticky.