Allianz Chief Economic Adviser El-Erian: ‘Transitory’ Inflation Prediction Perhaps Worst Ever by the Federal Reserve

BRENNAN The Federal Reserve ░░░░░░░░ Jay Powell has said ░░░░░░░░ will retire that word ░░░░░░░░ It sounds like you ░░░░░░░░ saying that word should ░░░░░░░░ be used at all ░░░░░░░░ EL ERIAN Yeah I ░░░░░░░░ been saying this for ░░░░░░░░ The characterization of inflation ░░░░░░░░ transitory is probably the ░░░░░░░░ inflation call in the ░░░░░░░░ of the Federal Reserve ░░░░░░░░ it results in a ░░░░░░░░ probability of a policy ░░░░░░░░ So the Fed must ░░░░░░░░ starting this week regain ░░░░░░░░ of the inflation narrative ░░░░░░░░ regain its own credibility ░░░░░░░░ it will become a ░░░░░░░░ of higher inflation expectation ░░░░░░░░ feed onto themselves BRENNAN ░░░░░░░░ s an incredible thing ░░░░░░░░ say not just about ░░░░░░░░ Fed chair but the ░░░░░░░░ Secretary is a former ░░░░░░░░ chair herself Why do ░░░░░░░░ think that they are ░░░░░░░░ fundamentally wrong EL ERIAN ░░░░░░░░ I think the numbers ░░░░░░░░ proven that transitory inflation ░░░░░░░░ a mischaracterization The Fed ░░░░░░░░ expected inflation to be ░░░░░░░░ 6 8 percent If ░░░░░░░░ look at all the ░░░░░░░░ they made this year ░░░░░░░░ were way below this ░░░░░░░░ they fundamentally misanalysed the ░░░░░░░░ Now that s not ░░░░░░░░ problem if they catch ░░░░░░░░ now If they re ░░░░░░░░ about their mistake and ░░░░░░░░ steps now they can ░░░░░░░░ regain control of it ░░░░░░░░ So the Fed has ░░░░░░░░ meeting this coming week ░░░░░░░░ you know they ve ░░░░░░░░ undertaking these emergency programs ░░░░░░░░ of the pandemic buying ░░░░░░░░ like 100 billion in ░░░░░░░░ each month Are you ░░░░░░░░ they need to hit ░░░░░░░░ brakes hard right now ░░░░░░░░ order to get control ░░░░░░░░ ERIAN No I m ░░░░░░░░ that in order to ░░░░░░░░ hitting the brakes hard ░░░░░░░░ if you ve hit ░░░░░░░░ brake hard in a ░░░░░░░░ months there s a ░░░░░░░░ you send this economy ░░░░░░░░ a recession and it ░░░░░░░░ be unnecessary harm to ░░░░░░░░ What they need to ░░░░░░░░ now Margaret is ease ░░░░░░░░ foot off the accelerator ░░░░░░░░ is no reason why ░░░░░░░░ should be injecting so ░░░░░░░░ liquidity There is so ░░░░░░░░ reason why they should ░░░░░░░░ boosting the housing market ░░░░░░░░ a time when house ░░░░░░░░ are pricing Americans out ░░░░░░░░ buying homes They should ░░░░░░░░ their foot of the ░░░░░░░░ in order to avoid ░░░░░░░░ on the brakes later ░░░░░░░░