El-Erian: Fed Will Pause, Keep Open Possibility of Hike

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Bloomberg 09/16 06:04 · 11.4k Views

Mohamed El-Erian, a Bloomberg Opinion columnist, comments on Federal Reserve monetary policy during an interview with Jonathan Ferro on "Bloomberg The Open." El-Erian's opinions are his own.

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  • 00:00 Labor market power the table crude in the ninety s if you at federal reserve next week what are you thinking about all of this so they'LL pause I don't think at this point they can hike but they'LL keep wide open the possibility of another hike and they're going to push back against this notion that they'LL be cutting anytime soon.
  • 00:16 The message will be were going a little bit higher.
  • 00:19 And we're gonna stay there for longer should they worry about ninety Dollar crude if it's just a supply shock should they worry about that they should I mean otherwise they're going to repeat the same mistakes they made in twenty twenty two.
  • 00:30 Which was which was to think that this is isolated to not realize the doselll over effects you know the big hope the linear thisinflation argument was goods were disinflating yeah energy in some cases prices were falling energy services were inflating but if you wait long enough services will start to disinflate as well and the fear is that goods would start inflating.
  • 00:52 Now we're seeing goods are going to start to inflate and that that's I suspect we keep people up in in Washington I trying to tea you up to use the word transitory the t word that's the question people are asking now is this disinflationary trend of the last few months transitory.
  • 01:09 No transitory isn't a time concept it is whether it changes behaviors.
  • 01:14 Something is transitory if you believe it is temporary is reversible therefore we should look through it it doesn't change your when when these sorts of news start changing people's behavior then it's not transit.