Prominent Economist Warns Inflation Not Transitory, Could Be ‘Shock’ to Financial System

Contact Your Elected Officials
The Epoch Times

More U.S. economists are starting to publicly warn of rising inflation, with renowned economist Mohamed El-Erian saying he worries “a great deal” that inflation will not be transitory and arguing that there’s too much “on-the-ground evidence” that it will stay high.

In a recent op-ed in the Financial Times, El-Erian, who is one of the most widely followed economists, said central banks and markets need to “widen their perspective” to avoid significant damage to the economic and financial system.

El-Erian began his op-ed by stating, “It is not often that I take a very strong view that runs directly counter to the market consensus.”

He noted that the economic growth in the United States would be robust, but voiced skepticism over the “Goldilocks market consensus” that inflation will be transitory.

“I do worry a great deal, however, about the widespread conviction that the current rise in inflation will be transitory,” he wrote.

El-Erian backed his views by stating that there’s “all the on-the-ground evidence of structural changes in supply at a time when aggregate demand will remain robust.”

“To be clear, I do not expect a return to the inflation of the 1970s. But we have to respect the possibility of a shock to a financial system that has been conditioned and wired for the persistence of lower and more stable inflation,” he said.

El-Erian is president of Queens’ College at Cambridge University. He previously chaired President Barack Obama’s Global Development Council.

After decades of nearly zero inflation in the country, many investors have little idea about two historical dynamics, El-Erian warned.

“First, seemingly one-off increases in prices can cascade through the system,” he said. “Second, a rise in inflation can be persistent, starting with commodities and prices at the factory gate only to end up in consumer prices and wages.”

Many prominent economists including former Treasury Secretary Larry Summers have sent strong cautionary messages about how excessive government spending could overheat the economy and create damaging levels of inflation.

BY EMEL AKAN

Read Full Article on TheEpochTimes.com

The Thinking Conservative
The Thinking Conservativehttps://www.thethinkingconservative.com/
The goal of THE THINKING CONSERVATIVE is to help us educate ourselves on conservative topics of importance to our freedom and our pursuit of happiness. We do this by sharing conservative opinions on all kinds of subjects, from all types of people, and all kinds of media, in a way that will challenge our perceptions and help us to make educated choices.

Obama Floats ‘New Forms of [State-Controlled] Journalism’

Notorious nemesis of civil liberties one and all, Barack Obama, ]apparently endorses a heavy state hand in the “regulation” of information.

Privilege Is Financial, Not Racial

If we stay divided by race, we’ll keep fighting each other while the true elites of all races thrive unseen, counting their wealth in comfort.

California Repeats Illinois’ History, PROSECUTE Newsom!

California may have improperly licensed 62,000 illegal aliens as Commercial Driver’s License (CDL) truck drivers.

The Stage Is Set For A US-Instigated Security Dilemma Between The Eurasian Rimland & Heartland

The US sends mixed signals on the Sino-Russo alliance after Trump downplayed concerns while Hegseth said he was ordered to “re-establish deterrence.”

Chambers of Horror

Using a shutdown to legislate is like using a flame thrower to light a candle, it provides light momentarily but destroys everything in its path.

New Mexico to Roll Out Free Universal Child Care On Nov. 1

New Mexico to become first state to offer no-cost universal child care to legal residents after ranking worst state in the country for child well-being.

More Than 140 Illegal Immigrant Truck Drivers Among 223 Arrested in Indiana Sting

Federal agents arrested over 140 illegal immigrant truck drivers in Indiana during a highway operation targeting public safety threats nationwide.

Brooke Rollins Denies USDA Has Money to Fund SNAP as Suspension Looms

Agriculture Sec. Brooke Rollins denied reports that her agency has money to pay for the SNAP that will be cut or suspended for beneficiaries Nov. 1.

FBI Foils Alleged Halloween Terror Plot, Arrests Multiple Suspects in Michigan

The FBI prevented a potential terrorist attack over Halloween weekend and arrested multiple suspects in Michigan, FBI Director Kash Patel said on Oct. 31.

US, South Korea Finalize Trade Deal Reducing Tariffs, Boosting American Investment

The U.S. and South Korea finalized a major trade deal on Oct. 29 as President Trump wrapped up the final hours of his Asian tour on the Korean Peninsula.

Trump, Japanese PM Sign Critical Minerals, Rare Earths Deal

The U.S. president visited Tokyo on the second leg...

Trump Hikes Canada’s Tariffs by 10 Percent for Not Pulling Anti-Tariff Ad Immediately

Trump announced he will increase tariffs on Canada by 10% after ad by provincial government of Ontario misrepresented President Reagan’s speech on tariffs.

Trump Rolls Back Emissions Rules on Copper Smelters

President Trump issued a proclamation aimed at reversing a Biden-era environmental rule that enforced stricter air emission standards on copper smelters.
spot_img

Related Articles

Popular Categories

MAGA Business Central