Economics

Fed Can’t Blink After Being ‘Asleep at the Wheel,’ El-Erian Says

Framework ‘not fit for purpose’ and creates huge challenge
Central bank failed at communication and analysis, he says

WATCH: Mohamed El-Erian, University of Cambridge Queens’ College president and Bloomberg Opinion columnist, says Federal Reserve President Jerome Powell faces a “huge” challenge in his speech at Jackson Hole. Source: Bloomberg

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By Katia Dmitrieva

August 25, 2022 at 12:49 PM UTC

Updated on

August 25, 2022 at 1:03 PM UTC

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The Federal Reserve “should not blink” as it addresses hot inflation, and Chair Jerome Powell faces a “huge” challenge finding ways to cool price growth without damaging the economy as he prepares to address the global central banking community, said Mohamed El-Erian.

“The Fed is so late that it’s looking at two challenges: putting the inflation genie back into the bottle and it’s looking at not creating too much damage to economic growth and inequality,” El-Erian, the chief economic adviser at Allianz SE, said on Bloomberg Television’s Surveillance on Thursday.