Noted economist and chief economic adviser at Allianz, Mohamed El-Erian, has voiced his concerns about the Federal Reserve’s approach to inflation, warning that it could be making a big “mistake.”
Fed Needs Rate Cut, Inflation Target Rethink
El-Erian, on CNBC’s Closing Bell on Tuesday, criticized the Federal Reserve’s heavy reliance on data, which, according to him, is causing a delay in crucial policy adjustments. He pointed out that by the time data provides a clear indication of what should have been done, it’s already “too late.”
El-Erian also highlighted the issue of the Fed’s strategic view of the economy, stating that unlike previous Fed chairs like Alan Greenspan, Ben Bernanke and Janet Yellen who had a forward-looking approach, the current chair, Jerome Powell is almost “wholly backward looking.” He believes this has led to a lack of strategic vision for the future.