The Fed could 'crush' the US economy by pursing its inflation target too quickly, Mohamed El-Erian warns
The Federal Reserve could crush the US economy if it fights to bring inflation down quickly to its target of 2%, according to top economist Mohamed El-Erian.on Saturday that"getting to 2% quickly would risk unnecessarily crushing the economy" but added the"credibility-damaged Fed" would struggle to adopt an alternative target.
He said the Fed"steadfastly pursuing" the target was"inappropriate for a world of deficient aggregate supply." The Fed raised interest rates for the 10th time in a row this month – from near-zero last March to upward of 5% today. Inflation has cooled but still stood at 4.93% in April. don't think the Fed can meet 2%, including BlackRock, Bank of America and others who are warning that inflation will remain higher for longer.
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