by El-Erian is 100% correct here from the Monetarist perspective… even with all of the “inflation!” media hysteria end of last year and now anti “inflation!” statements “jawboning!” from the Fed people the Fed hasn’t really done anything…They increased the policy rate 0.25% a few weeks ago and don’t even have a meeting this month and will probably go up another 0.25% two months from now… stopped the asset purchases ok but haven’t yet even started the “QT”…Meanwhile they are reporting “inflation!” approaching +10% annual….What are they waiting for? 🤔How late is the #Fed? Very:Having misunderstood the inflation dynamic, it eroded its credibilityHaving missed a wide-open window last year to adjust policies when economic growth was on an upswing, it no longer has good policy optionsIt has lost
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El-Erian is 100% correct here from the Monetarist perspective… even with all of the “inflation!” media hysteria end of last year and now anti “inflation!” statements “jawboning!” from the Fed people the Fed hasn’t really done anything…
They increased the policy rate 0.25% a few weeks ago and don’t even have a meeting this month and will probably go up another 0.25% two months from now… stopped the asset purchases ok but haven’t yet even started the “QT”…
Meanwhile they are reporting “inflation!” approaching +10% annual….
What are they waiting for? 🤔
How late is the #Fed? Very:
— Mohamed A. El-Erian (@elerianm) April 2, 2022
Having misunderstood the inflation dynamic, it eroded its credibility
Having missed a wide-open window last year to adjust policies when economic growth was on an upswing, it no longer has good policy options
It has lost control of its policy narrative