{"id":12529,"date":"2022-05-29T23:30:31","date_gmt":"2022-05-29T23:30:31","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/the-fed-must-decide-between-two-policy-mistakes-says-economist-economics-bitcoin-news\/"},"modified":"2022-05-29T23:30:31","modified_gmt":"2022-05-29T23:30:31","slug":"the-fed-must-decide-between-two-policy-mistakes-says-economist-economics-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/the-fed-must-decide-between-two-policy-mistakes-says-economist-economics-bitcoin-news\/","title":{"rendered":"The Fed Must Decide Between Two Policy Mistakes, Says Economist \u2013 Economics Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
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Allianz Chief Economic Advisor Mohamed El-Erian says the Federal Reserve will have to \u201cdecide between two policy mistakes.\u201d One risks triggering a recession and the other could prolong inflation well into 2023. \u201cI think the time has passed for a soft landing,\u201d the economist stressed.<\/strong><\/p>\n

Mohamed El-Erian on Inflation, Recession, and the U.S. Economy<\/h2>\n

Economist Mohamed El-Erian discussed where the U.S. economy is headed and the Federal Reserve\u2019s plan to bring inflation under control in an interview with Bloomberg Friday.<\/p>\n

El-Erian is Chief Economic Advisor at Allianz, the corporate parent of PIMCO, one of the largest investment managers, where he was CEO and co-chief investment officer. He is also the president of Queens\u2019 College, Cambridge University.<\/p>\n

He was asked what\u2019s feasible for Federal Reserve Chairman Jerome Powell under the current economic environment. The economist replied that \u201cat best,\u201d it is \u201cwhat Chair Powell called a \u2018softish\u2019 landing, and the \u2018ish\u2019 is really important.\u201d He elaborated:<\/p>\n

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I think the time has passed for a soft landing.<\/p>\n<\/blockquote>\n

He continued: \u201cWe could have done it but that would have implied the Fed moving nine months ago. It should have. It didn\u2019t. So, instead of tightening into a growing and dynamic economy, it is tightening into a slowing economy.\u201d<\/p>\n

Noting that \u201cit is very difficult to get a soft landing,\u201d the economist stated that \u201cthe best you can hope for right now is a soft-ish landing.\u201d However, he said the probability of that happening is \u201cNot as high as [he] would like it to be.\u201d<\/p>\n

El-Erian further opined:<\/p>\n

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The Fed is going to have to decide between two policy mistakes. Hit the brakes too hard and risk a recession or tap the brakes in a stop-go pattern \u2026 and risk having inflation well into 2023.<\/p>\n<\/blockquote>\n

The Allianz economist is not the only one warning that the U.S. economy could be headed towards a recession. Tesla CEO Elon Musk said last week that we are either already in a recession or approaching it. However, he sees it as a good thing<\/a>.<\/p>\n

Blackrock, the world\u2019s largest asset manager with nearly $10 trillion under management, similarly said last week:<\/p>\n

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If they [the Fed] hike interest rates too much, they risk triggering a recession. If they tighten not enough, the risk becomes runaway inflation.<\/p>\n<\/blockquote>\n

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Fed<\/a>, Fed Chair<\/a>, fed inflation<\/a>, fed policy mistakes<\/a>, fed recession<\/a>, jerome powell<\/a>, Mohamed El-Erian<\/a>, Mohamed El-Erian fed policies<\/a>, Mohamed El-Erian inflation<\/a>, Mohamed El-Erian recession<\/a>, soft landing<\/a>, softish landing<\/a><\/div>\n<\/div>\n

What do you think about El-Erian\u2019s comments? Let us know in the comments section below.<\/strong><\/em><\/p>\n

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\nKevin Helms <\/h6>\n

\nA student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

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Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

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