Mohamed El-Erian is Here to Ruin the Fed’s Dream of Low Inflation

Everyone loves low inflation—it means you can get more bang for your buck at the store. But now economist Mohamed El-Erian is here to suck all the fun out of it.

El-Erian recently predicted that despite the Federal Reserve’s best efforts, inflation could remain “sticky” in the coming years.

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Don’t Worry, El-Erian Has Authority

El-Erian is the Chief Economic Adviser at Allianz, one of the world’s biggest financial companies, so you can be pretty sure he knows what he’s talking about. Plus, it’s not like he just woke up one morning, realized he was bored, and decided to make this up. According to him, the one thing that could bring down inflation is manufacturing productivity (pffft, like that’s going to happen).

What Low Inflation Could Do For You

Having to pay less for stuff sounds like an awesome idea, but it’s not just like a Saturday night at the mall—low inflation presents long-term benefits as well. Low inflation can contribute to higher employment, stronger wages and a healthier stock market. These are the dreams the Fed has been trying to bring to life. So essentially, El-Erian is raining on the Fed’s parade and makin’ it a real bummer.

Fed’s Efforts Are Not in Vain…Yet

Still, it’s not all doom and gloom. El-Erian hasn’t discounted the efforts of the Federal Reserve—sadly they just don’t have the magic powers to tackle this problem. He suggests they just keep doing what they’re doing, which means they’re still our only hope.

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The Low Down

So, here’s the low down:

  • Low inflation is awesome — it means you can get more for your money!
  • Mohamed El-Erian says it’ll be “sticky” despite the Fed’s best efforts.
  • Manufacturing productivity could be the key to bringing it down.
  • The Fed is still out there trying to make our dreams come true.

We’ll have to wait and see what comes of all this, but one thing’s for sure—El-Erian’s prediction has really put a damper on the Fed’s hopes.

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