El-Erian has repeatedly pointed to the complexity of conquering inflation without wreaking havoc on the economy. On Saturday, PIMCO’s former CEO and co-chief investor raised the prospect of global “stagflation” — a painful combination of stagnant economic growth, surging unemployment, and stubborn inflation.
The top-notch economist also cautioned earlier in September that Europe’s energy crisis, China’s ongoing lockdowns, and the US’s elevated inflation and waning consumer demand were making global growth more fragile. As a result, central banks are more likely to drive their economies into recession, he said.
El-Erian’s latest tweet suggests he sees persistently higher rates, and a greater risk of the Fed and its peers botching their inflation fights, scuppering economic growth, and causing widespread job losses.
