Ahead of the release of the most recent customer cost index reading this week, Allianz Chief Economic Adviser Mohamed El-Erian informed CBS’ “Face The Nation” Sunday that he forecasts heading inflation “will probably come down to about 8%,” however that core inflation “is still going up.”
Core inflation is what procedures the motorists of inflation and how broad they are, so El-Erian stated a boost in core inflation implies “we still have an inflation issue.”
Even if core inflation is still growing, nevertheless, El-Erian stated it will ultimately boil down.
“The question is, does it come down with a slowdown in the economy or a major recession?” he stated on “Face the Nation.”
The oil manufacturer group OPEC+ revealed its biggest supply cut given that 2020 on Wednesday, and El-Erian stated this choice “does hurt the U.S.,” as it runs the risk of triggering inflation to increase once again. But he stated the cut did not come as a surprise given that the group is seeking to secure oil costs in the face of decreasing need.
“That’s what they do,” he stated. “But it’s certainly not good news for the U.S. economy.”