Connect with us

Hi, what are you looking for?

Politics

Economist Mohamed El-Erian: Most current inflation ‘could have been avoided’ if Fed acted earlier

Most of the current record high inflation could have been avoided had the Federal Reserve acted earlier and shown humility after it wrongly described inflation as “transitory,” economist Mohamed El-Erian said Sunday.

El-Erian, chief economic advisor at Allianz, appeared on CBS’s “Face the Nation” to discuss what caused the current inflation and where it was likely to be heading.

“We got here because we got a combination of things happening,” El-Erian said, citing the war in Ukraine, the energy transition, and how the Fed incorrectly judged inflation and fell behind.

“All these things came together and are feeding now this everything inflation. The price of nearly everything is going up and making us feel really insecure,” he said.

LARRY KUDLOW: A DIFFERENT PLAN TO CRUSH INFLATION

El-Erian said that most of the inflation “could have been avoided if early action had been taken” by the Fed, which must now regain credibility to ease long-term inflation expectations.

“I was very puzzled when a year ago so many people were so confident that inflation was transitory,” he said. “There was so much we didn’t understand about the post-COVID inflation that humility would have been a good idea.”

El-Erian said things still are not going well for the Fed because it has yet to explain why it got the forecast “so wrong for so long.” 

El-Erian fears that in this current period of “stagflation” – low growth, high inflation – inflation may reach 9%. He called it the darkest picture of what could lead to a recession.

He added that his most optimistic outlook is that the Fed regains control of inflation, which leads to a “soft landing” – meaning that inflation comes down without sacrificing growth. 

Click to comment

Leave a Reply

Your email address will not be published.

You May Also Like

Politics

Texas Democratic gubernatorial candidate Robert “Beto” O’Rourke held a “rally for reproductive freedom” in the state capital of Austin on Sunday, just two days...

Technology

Press play to listen to this article The European Union is working to revamp its flailing 5G rollout and has Big Tech’s largest platforms...

Politics

 A ShopRite worker in Staten Island was arrested Sunday for allegedly slapping former New York City Mayor Rudy Giuliani on the back at a...

Politics

Michigan Gov. Gretchen Whitmer on Sunday attempted to blame former President Donald Trump for the rise in extremism when responding to a question about...

United States

GRAND JUNCTION, Colo. — Just six weeks before the 2020 presidential election — game day for vote-counting bureaucrats — Tina Peters was so proud...

Politics

New York Gov. Kathy Hochul, a Democrat, said Sunday that the Empire State will be a “safe harbor” for those seeking an abortion after...

Politics

The landmark Supreme Court ruling overturning Roe v. Wade is already impacting one of the more unique midterm races in the country, where Utah...

United States

On the first weekend after the Supreme Court overturned nearly five decades of constitutional abortion rights, Democrats seized on the ruling to portray their...