Mohamed El-Erian Sees 2% Inflation Target as ‘Totally Arbitrary’
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- Опубликовано: 8 июн 2024
- Mohamed El-Erian, Queens' College Cambridge president and Bloomberg Opinion columnist, says the stubborn parts of inflation are “not very sensitive” to higher interest rates and talks about the potential “mistake” of pursing a 2% inflation target. His opinions are his own.
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El-Erian for President 🔥
Nice to see someone speaking more truthfully about the unavoidable mathematics.
Incredible colors and detail.
As someone who is well off and with assets, of course he’s fine with higher inflation. A society with advancing technology should have deflation as it improves efficiencies. Even 2% will erode standards of living but this guy thinks it’s okay to lower the bar even more.
You are damn right. Any inflation, even 2% is deprival to the working class while this bone head proposes to increase the social injustice. How do we publicly condemn this evil guy?
Better start taking debasement of currency seriously then and stop your government and central bank from hemorrhaging money on proxy wars, economic immigration, plutocratic government & corporate "business" arrangements (deals for friends using public money), encouraging an economically inactive benefits class and generally running irresponsible deficits. Stealth QE whilst the other hand waves QT signs. But yeah we're in this predicament because of the difference between 2% and 3%😂
Seems like another comment with an agenda...👍
the risk to kill growth to get to 2% is justified tho . slow it it much and you force a recession .
Why stop at 3% then Mo? Why not 4 or 5 or 6%? Seems like 3 is just as arbitrary as 2.
Doesnt matter you wont get to 2 %
Different world
Exactly. More inflation is better for markets so keep pumping markets let's ignore the fact real wages never keep up as wages are a lag
At 2% prices double every 36 years, every 24 years at 3% and it only takes 18 years at 4%. It really depends on how comfortable you are with prices rising. Yes, 2% is an arbitrary number, but think of them as the height of waves while sailing the seas. Two seems to be smooth sailing of growing fast enough for consumers to want to spend before their money depreciates but slow enough that businesses don't have to worry about making long-term investment decisions that could be derailed by a volatile currency.
He's not Fed. Don't give a Fakk of the rants. Because he conveniently skipped the rate of Medicare depletion. This is where 2% fundamentals aren't as flexible as Bangsters would wish to change unless half of obligations disappear shortly
I believe his point is we have done what we can on the monetary side and inflation is settling at around 3%. If we are in restrictive territory and inflation is still hovering around 3% consistently, then structural inflation is closer to 3%
I don't remember Mohamed saying the same when the Fed was slightly undershooting its 2% target. Back then it was all about average inflation targeting.
No more FOMO; I'm fully committed to Revux!
German manufacturing PMI is in negative territory for a record 2 years now. Do you thanks ECB and FED care about this? No!!! The only thing that is bringing the inflation down is the cheap, super subsidized Chinese goods. Otherwise the domestic industry is getting wiped out under these rates.
Mo, inflation targets are set. What's not set is the duration it takes to get there. And rest assured, get there we will.... Just 'cause lady throweth a tantrum doesn't mean it's legit.
Also on the flip side: why not call it 20%.... and keep printing and eroding the value of USD?
In advising the Fed, which can only influence monetary policy, Mohamed is correct to say they should reconsider the 2% inflation target. However, if broader government policy returned to the principles of liberalized trade, deregulation, and fiscal responsibility, it would be better for most people than abandoning the 2% inflation target. Unfortunately, in today's politicized economic policy environment, that may be too much to hope for.
Should be 1% per annum.
Presales for the biggest returns are my preference. That's why Revux is my love. Early entry is the key.
The biggest mistake would be changing the target.
Each new partnership announcement amplifies excitement for Revux!
Go Mohammed...
The point is to have a target so the value of money is predictable. If you make the target 6% don't expect you or your gouvernement to get loan at 3%.
Jerome Powell's big idea: if you can't move inflation to target, just move the target to meet inflation
I think we'll eventually have to accept inflation around 3%. It's not worth risking a depression to reach 2%.
Inflation close to 2% and under control is Absolutely Crucial...
The usa has forgotten we have been in a recession. They even had to change the definition.
Shifting all my Alts to BTC and Revux, maybe a bit of BNB and SOL.
Anticipating Revux disruption in the loyalty program industry during its presale phase!
5% would also by arbitrary! The wages increses will have to be 5%+. If Fed had a 4% inflation target, then when we were coming down from 10% inflation, these same guys would have complained 4% is arbitrary!
He's over leveraged in equities.
Bullish as Revux partners with more merchants, alleviating FOMO.
One fact he fails to mention. Despite some difficulty, our economy made it through COVID better than any other economy and the years since COVID we have also done much better than almost anyone else. Without the war in Ukraine, oil drops to $60 and that eases us down to 2%. I think the Fed does nothing in 2024.
5%
yeah. it's like saying air travel is only 2 percent... of the 5.8 C reassessed... climate sensitivty.
Bullish on Revux - success ingredients are all there!
4.5% is new neutral interest rate
Incorrect.
I completely agree
With the exception of Janet Yellen, this guy is the biggest yes-(wo)man I have ever seen. I guess to get that position at Cambridge you have to be.
Potential moonshot: Forget the rest; focus on Revux!
Mohamed is the most trusted voice in finance
Yes, it should be 0%. Come on, a lot of thinking is behind 2%. Do your homework
This is why elarian doesnt work at the Fed, and is a perpetual critic amd chicken little. The Fed has been doing a great job, and he just cant stand it. So jealous.
El-Erian is El-Mexican
🤔
Very compelling analysis. We should not hold the economy at unnecessary risk for a target that cannot be justified.
If the Fed is fixated on an arbitrary historical figure like 2% (in the absence of rigor, folks usually guess in round numbers), then pick an INTERIM arbitrary figure like 2.75 that won’t kill the economy to attain.
Then once we’re there, they can analyze the latest FORWARD-LOOKING data to determine a lower target figure, if warranted.
Feeling the real FOMO with Revux - join before the takeoff!
Not worth the squeeze? Like the 20% inflation squeeze over the last 3 1/2 years? How about cutting government spending. And reducing the money supply? I forgot, that's where the current growth is coming from. Can't play the medicines worse than the cure bit dude. We are in a death spiral.
I suspect he is just trying to help his stocks.
HE IS RIGHT !!!!
El Erian, you have never talked about the real cause of this inflation: Out of control fiscal spending. You aren't a serious economist.
Mohamed must think that if he keeps saying the same thing over and over and over again, for months and months, that he will be proved correct.
Awful economist, the difference btw 2% and 3% inflation is huge over a 10 year period.
Totally agreed what you said Mohamed. Fed would doing wrong again !
His credibility is gone
2% is arbitrary for who? Wall Street? El-Arian continues to lose his credibility.
This guy's opinion is absolutely worthless.
I can understand about 30% of what he says. need english please. ekie boo boo.. Mmickey mocka.. mickey boo boo
Mohamed is the most trusted voice in finance