Central Banks

El-Erian Sees Danger That Fed Will Do ‘Too Little’ on Inflation

He says Powell faces ‘tricky’ task of dual mandate on economy
Stagflation threat exists if inflation melds with recession

Mohamed El-Erian, chief economic adviser at Allianz and Bloomberg Opinion columnist, says the path of US inflation is “too problematic” for the Federal Reserve to pivot from its current policy-tightening stance on “Bloomberg The Open.”Source: Bloomberg

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By John McCorry and Jonathan Ferro

November 2, 2022 at 2:42 PM UTC

This article is for subscribers only.

Investors hunger for a hint from Federal Reserve Chairman Jerome Powell on Wednesday that the central bank may soon pivot from its path of stepped-up interest rates. That worries market strategist Mohamed El-Erian.

“Inflation is more problematic than what a downshift now would imply,” El-Erian, chairman of Gramercy Funds and Bloomberg Opinion columnist, said on Bloomberg Television’s “The Open.” “The risk is that they will do too little and that’s the higher risk going forward.”