3rd Wave of Inflation Will Be Unleashed If Fed Doesn’t ‘Get Its Act Together’: El-Erian

The Epoch Times Header

Economist Mohamed El-Erian has warned that a third wave of inflationary pressures is building and will be “unleashed” if the Federal Reserve doesn’t act quickly.

El-Erian, the former CEO of American investment management firm Pimco, made the comments on social media on July 13, shortly after financial markets were shocked by the U.S. annual inflation rate rising to 9.1 percent in June, marking its highest level since November 1981.

Economists had forecast that inflation would come in at 8.8 percent in June.

“Looking forward, inflation will come down over the next couple of months. That’s the good news,” El-Erian said on Wednesday.

However, the expert noted that a “third wave of inflationary pressures”—the underlying causes of inflation—is building, and “will be unleashed if the Fed doesn’t get its act together quickly.”

“With the first best policy option now long gone due to the first two stages of the ongoing Fed policy mistake, the recession risks are increasing accordingly,” El-Erian said.

The economist added that this means that households, particularly those in the most vulnerable segments of society, are likely to take a second “big hit,” adding that he believes “much of this could have been avoided.”

Federal Reserve officials in mid-June raised the benchmark interest rate by 0.75 percentage points, and were widely expected to raise rates by another 0.75 percentage points this month as inflation continues to soar.

However, after Wednesday’s headline reading, experts have now increased the odds of a 100-basis-point rate hike at the Fed’s next policy meeting to 77 percent.

‘Not Acceptable’

According to data released by the Bureau of Labor Statistics (BLS) on July 13, the cost of rent, food, energy, and medical care all rose in June.

Food prices soared 10.4 percent for the 12 months ending June, marking the largest 12-month increase since the period ending February 1981, while the energy index advanced by 41.6 percent.

By Katabella Roberts

Read Full Article on TheEpochTimes.com

The Epoch Times
The Epoch Timeshttps://www.theepochtimes.com/
Tired of biased news? The Epoch Times is truthful, factual news that other media outlets don't report. No spin. No agenda. Just honest journalism like it used to be.

Columns

Viewers like you

There is no constitutional authority for any spending on public broadcasting – period. Any questions: See Article 1, Section 8 of the U.S. Constitution.

Beyond the Trump-Musk fallout?

We are witnessing an unprecedented, unhinged Democrat effort to use lawfare, big Democrat donors, street theater, congressional disruptions, potty-mouth videos, the administrative state, the legacy media, and discredited pollsters to stop the Trump agenda.

Trans-wormal

No worm ever said "I am anthropomorphizing, I am a butterfly" to a toad or flock of geese and expected acknowledgement and support.

In Greenland’s Icy Capital, Past Troubles Haunt Hopes for the Future

As geopolitical realities and ongoing economic growth raise the stakes, U.S. interest in Greenland and the dream of independence may change things in a big way.

How a Chinese Government Statistician Was Forced to Report Fake Data

Chinese local govt employee produced a non-authorized report on bees and was visited by police and threatened with being sent to a mental hospital.

News

Supreme Court Sides With DOGE in Social Security, Records Cases

The Supreme Court handed DOGE two big wins late on June 6 in its effort to reduce the size of the federal government.

Kilmar Abrego Garcia Returns to US to Face Criminal Charges

Kilmar Abrego Garcia, a citizen of El Salvador, is on his way back to the US, where he will face criminal charges for allegedly smuggling illegal immigrants.

White House Adviser Gives Update on DOGE’s Future Amid Musk–Trump Spat

A top White House adviser said DOGE’s work will likely continue amid a spat between its former chief, Elon Musk, and President Donald Trump.

Trump Administration Asks Supreme Court to Allow Dismantling of Education Department

Trump admin asked Supreme Court to allow it to resume dismantling U.S. Dept of Education, following a lower court’s previous order halting process.

FTC Warns of Rising Student Loan Scams, Says Fraudsters Took Millions From Borrowers

FTC is warning borrowers to steer clear of student loan debt-relief scams, after shutting down group of companies that allegedly charged millions in illegal fees and left customers worse off.

Walmart’s Drone Delivery Coming to 5 More US Cities

Walmart is set to launch its drone delivery service in five more U.S. cities: Atlanta, Charlotte, Houston, Orlando, and Tampa, the company.

Court Orders Trump Administration to Restore AmeriCorps Funding to States

Federal court ordered Trump admin to restore AmeriCorps funding to states. The ruling comes as part of a lawsuit filed by 24 states and DC.

Tax Deductions You Can Take Without Itemizing

It’s not always beneficial to itemize. With IRS’s current standard deduction for 2025 most Americans who can’t itemize go with standard deduction.
spot_img

Related Articles