El-Erian Sees Inflation Cascading Through U.S. Economy

[vc_row][vc_column][vc_video link="https://www.youtube.com/watch?v=hpxd5JLVrR0"][/vc_column][/vc_row][vc_row][vc_column][vc_column_text][/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]chairman powell in the news conference defined transit tree and he said a price level adjustment that doesn't shape the inflation process and he mentioned beyonce 12 months just as an example i know you push back against that why do you think we are already shaping what the chairman would call the inflation process you know john when i listen to people who say oh it's contained to a few items and the chair repeated over and over again travel leisure and cars okay when you hear it it reminds me of 1974 when it was contained to just oil at that time and then what you find out is that there's a way that it cascades through the economy i gave you the example of chips earlier that's that's recently and what i see is this cascading that is that is happening from input prices from wages from transportation it cascades now it takes a while it doesn't happen instantaneously and that's the difference that's a fundamental difference if you've lived through an inflationary process you have figured out that there are lags in the process and keep a close eye on the transmission mechanism if you haven't lived through it it's very easy to dismiss every price increase as isolated mohammed can you put some numbers on this what you're actually looking for because one man's move from six to three is another man's transitory and i'm wondering what you think is going to persist here what levels of inflation you think will persist into next year so first of all let me be clear i am not talking about the inflations of the 70s and the 80s yep but i am talking about an inflation that's about double the amount of what the system is wired for you have to understand what the initial conditions are we have an economy that has been conditioned to very low inflation we have financial markets that have been conditioned to very low inflation so suppose you don't run an inflation of one to two percent suppose you run an inflation of four to five percent for a while what does that do to the economy what does that do to markets so i am looking at at persistent inflation that will be in the three to five percent range maybe four to five percent range and by the time it starts coming down which it will it would have triggered all these second round effects that we're going to be dealing with that's why i'd rather the fed ease its foot slowly off the accelerator then have to slam on the brakes now i am not in the bill dudley camp which is a real slam of the brakes but i am in a somewhat slam of the brakes that will cause unnecessary economic and financial volatility<br><!-- wp:image {"id":1776,"sizeSlug":"large","linkDestination":"none"} -->rn<figure class="wp-block-image size-large"><img class="wp-image-1776" src="https://en.videoencontexto.com/wp-content/uploads/2021/10/ElErian_Sees_Inflation_Cascading_Through_US_Economy_hpxd5JLVrR0.jpg" alt="El-Erian Sees Inflation Cascading Through U.S. Economy" /></figure>rn<!-- /wp:image -->[/vc_column_text][/vc_column][/vc_row]