El-Erian Blames Fed for ‘Very High’ Risk of a Damaging Recession

Although there is still a chance that the Federal Reserve would overshoot its target range, plunging the US economy into recession

Mohamed El-Erian, chief economist at Allianz SE, said the US economy is on "a rocky road to a better destination."

In addition to fighting inflation, the US central bank also needs to rebuild its reputation, according to El-Erian in an interview with CBS News on Sunday.

I worry that there is a very strong likelihood that we will experience a severe recession that was entirely preventable.

El-Erian, a frequent critic of the Fed, attributed that risk to the institution by "slamming on the brakes this year" after receiving criticism for being reluctant to act against inflation that was reaching four-decade highs.

Three times in a row, the Fed has increased its benchmark interest rate by 75 basis points, and recent remarks from Fed policymakers indicate that a fourth such hike is likely to occur next month.


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Leaving for the US to attend G-20 and IMF meetings is the finance minister