“I fear we risk a very high probability of a completely avoidable, destructive recession,” El-Erian notified “Face the Nation” from CBS, arguing that the Federal Reserve had made a mistake that would “go down in the history books.”
“One of them is misinterpreting inflation as temporary. They mean it’s temporary, it’s reversible, don’t worry about it. That’s mistake number one. And then mistake number two, when they finally realized that inflation was persistent and high. They don’t act. They don’t act in a meaningful way,” El-Erian said.
United Nations last week be warned global recession as the international economy takes action to curb inflation. A survey released last week found that nearly 9 out of 10 global CEOs expect a recession in the next year.
“Even [Federal Reserve] Chairman Powell has gone from looking for a soft landing to a soft-ish landing now talking about pain. And that’s the problem. It was a late Federal Reserve fee. Not only must it overcome inflation, but it must restore its credibility,” said El-Erian about the economic institution.