The U.S. consumer price index (CPI) climbed 9.1% in June to a 41-year high, sparking expectations that the Federal Reserve will raise interest rates sharply. Mohamed El-Erian, a well-known economist and chief economic adviser at Allianz, said the inflation data left the Fed with no choice but to react positively, suggesting a possible four-yard rate hike.
The Fed was so adamant that high prices were temporary, and now the consumer price index has accelerated to 9.1 percent, further undermining the Fed’s credibility, Ilairan said.
Illairan believes the Fed has no choice but to respond aggressively now, predicting the Fed will raise rates later this month by 3 yards and possibly 4 yards.
The Fed will meet on July 26-27. The central bank has successively raised interest rates by 1, 2 and 3 at this year’s meeting. If it raises interest rates by 4 this time, it means further tightening monetary policy.
Il Ellen has previously said that the factors driving inflation are increasing, such as staggering month-to-month gains in energy prices and pressure on housing and food prices, “It’s too early to say that inflation has cooled. Those who assert that inflation has Those who have peaked and will start to cool may need to change their minds.”
In addition, some economists believe that the Fed’s rate hike will trigger a recession in the U.S. economy, but Il Ellen believes that the U.S. still has a chance to avoid a recession, but it is inevitable that it will fall into high inflation and low growth, “stagflation” It’s my basic hypothetical situation.”
