Markets underestimate inflation
El-Erian said, during the Global Wealth Management Conference held by UBS Bank in Hong Kong, that markets are underestimating inflation in the services sector, which is still higher than goods inflation, and must be reduced much faster.
Any change in the Fed’s interest mandates could damage its credibility. “If you’re a central bank that has made a lot of monetary policy mistakes in the last few years, the last thing you want to do is give the impression that you’re going to change your target,” El-Erian said. “Do not expect any change in the inflation target.”
In response to a question at the conference, El-Erian said that 10-year Treasury yields may end the year near 4.5%, from 3.5%, while US GDP growth may reach about 1% to 2% as the economy returns to normal. , from the increase in savings during the pandemic period the previous year.
2024-01-20 21:00:00
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