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06-08-2022, 11:32 AM
Mohamed El-Erian
Allianz SE chief economic adviser
President of Queens' College, Cambridge
......
Inflation has hit a new 40-year high, and the latest numbers showed a jarring spike of 9.1% year-over-year. El-Erian says the Fed bears responsibility for how high inflation has skyrocketed.
"Had [the Fed] listened to companies, they would have been much more humble in saying that we don't quite understand the inflation dynamics... and yet the Fed got hooked on this notion that it's transitory, and then it got itself into a cognitive trap," he told Yahoo Finance's editor-in-chief, Andy Serwer.
......
the Fed overall and Powell specifically made a dire mistake when approaching inflation. Thinking of inflation as short-term allowed the Fed to resist making policy changes necessary to bring it down. He believes that would have included laying off quantitative easing
......
QE began in November 2008
......
The Fed continued with various iterations of QE for more than a decade.
......
the Fed let the problem get out of hand, and didn't pivot quickly enough.
"You ended up with this absurd situation in March, still pumping in liquidity," he told Yahoo Finance. "It was still doing QE in March... So, it's bad analysis, bad forecast, too-little-too-late, and miscommunication ‚ and that's how we've ended up in this mess."
https://sg.finance.yahoo.com/news/el-eri...33680.html
Allianz SE chief economic adviser
President of Queens' College, Cambridge
......
Inflation has hit a new 40-year high, and the latest numbers showed a jarring spike of 9.1% year-over-year. El-Erian says the Fed bears responsibility for how high inflation has skyrocketed.
"Had [the Fed] listened to companies, they would have been much more humble in saying that we don't quite understand the inflation dynamics... and yet the Fed got hooked on this notion that it's transitory, and then it got itself into a cognitive trap," he told Yahoo Finance's editor-in-chief, Andy Serwer.
......
the Fed overall and Powell specifically made a dire mistake when approaching inflation. Thinking of inflation as short-term allowed the Fed to resist making policy changes necessary to bring it down. He believes that would have included laying off quantitative easing
......
QE began in November 2008
......
The Fed continued with various iterations of QE for more than a decade.
......
the Fed let the problem get out of hand, and didn't pivot quickly enough.
"You ended up with this absurd situation in March, still pumping in liquidity," he told Yahoo Finance. "It was still doing QE in March... So, it's bad analysis, bad forecast, too-little-too-late, and miscommunication ‚ and that's how we've ended up in this mess."
https://sg.finance.yahoo.com/news/el-eri...33680.html
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