Economist Mohamed El-Erian says most inflation ‘could have been avoided’ if Fed acted earlier
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Most of the current record high inflation could have been avoided had the Federal Reserve acted earlier and shown humility after it wrongly described inflation as "transitory," economist Mohamed El-Erian said Sunday.
El-Erian, chief economic advisor at Allianz, appeared on CBS's "Face the Nation" to discuss what caused the current inflation and where it was likely to be heading.
"We got here because we got a combination of things happening," El-Erian said, citing the war in Ukraine, the energy transition, and how the Fed incorrectly judged inflation and fell behind.
"All these things came together and are feeding now this everything inflation. The price of nearly everything is going up and making us feel really insecure," he said.
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El-Erian said that most of the inflation "could have been avoided if early action had been taken" by the Fed, which must now regain credibility to ease long-term inflation expectations.