- The Federal Reserve in February should raise interest rates by more than the markets are anticipating, said economist Mohamed El-Erian.
- The Fed should raise its benchmark rate by 50 basis points as inflation is likely to be sticky at 4% by mid-year, he told Bloomberg.
- Investors are pricing in near 100% odds the Fed will downshift to a rate hike of 25 basis points.
The Federal Reserve should opt for delivering a larger rate hike than markets are expecting at the start of 2023 because inflation may halt its downward trend in the coming months, said economist Mohamed El-Erian.
“I would go personally for 50 [basis points], and that’s because I think inflation is going to get sticky in mid-year at around 4%,” said El-Erian, chief economic adviser at Allianz, to Bloomberg in an interview broadcast on Friday.
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