El-Erian Says Economy Is Starting to ‘Go Through the Windshield’

Central banks are “slamming the brakes” to control inflation
Considering inflation transitory was a mistake by the Fed

Mohamed El-Erian, president at Queens College Cambridge and Bloomberg Opinion columnist, discusses the Federal Reserve’s ‘self-inflicted wound” impacting the US economy and financial system with Jonathan Ferro on “Bloomberg The Open.” His opinions are his own.Source: Bloomberg

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By Elaine Chen

October 11, 2022 at 2:55 PM UTC

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Allianz SE chief economic adviser Mohamed El-Erian said that aggressive monetary tightening by the Federal Reserve will not only damage the US economy, but will have an impact on the rest of the world.

The rapid pace of interest-rate hikes in response to inflation “is not stepping on the brakes, this is slamming the brakes,” El-Erian said on Bloomberg Television Tuesday, in response to an earlier remark by Bob Michele, chief investment officer of J.P. Morgan Asset Management. Michele had spoken about the ripple effects the Fed’s recent actions could have on the economy.