Failure to Bury ‘Transitory’ Inflation Narrative Risks Sparking Biggest Fed Error in Decades: Economist

Failure to Bury ‘Transitory’ Inflation Narrative Risks Sparking Biggest Fed Error in Decades: Economist
Federal Reserve Chair Jerome Powell testifies during a U.S. House Oversight and Reform Select Subcommittee hearing on the coronavirus crisis, on Capitol Hill in Washington, on June 22, 2021. Graeme Jennings/Pool via Reuters/File Photo
Tom Ozimek
Updated:

Failure on the part of the Fed to toss its stubbornly-held “transitory” inflation narrative and act more decisively to rein in persistently high price pressures raises the likelihood the central bank will need to slam on the brakes of easy money policies much more forcefully down the road, risking avoidably severe disruption to domestic and global markets, according to Queen’s College President and economist Mohamed El-Erian.

“In stark contrast with the mindset of corporate leaders who are dealing daily with the reality of higher and persistent inflationary pressures, the transitory concept has managed to retain an almost mystical hold on the thinking of many policy makers,” El-Erian wrote in an Oct. 25 op-ed in Bloomberg.
Tom Ozimek
Tom Ozimek
Reporter
Tom Ozimek is a senior reporter for The Epoch Times. He has a broad background in journalism, deposit insurance, marketing and communications, and adult education.
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