Ahead of the release of the latest reading of the consumer price index this week, Mohamed El-Erian, chief economic adviser to Allianz, told CBS’ “Face The Nation” Sunday that he predicts newspaper inflation “will likely fall to about 8 %”, but that core inflation “is still rising.”
Core inflation is what the inflation drivers measure and how broad they are, so El-Erian said a rise in core inflation means “we still have an inflation problem.”
Even if core inflation is still rising, El-Erian said it will eventually fall.
“The question is whether it will be accompanied by a slowdown in the economy or a major recession?” he said on “Face the Nation.”
Oil producer group OPEC+ announced its biggest supply cut since 2020 on Wednesday, and El-Erian said the decision “hurts the US” as it could push inflation up again. But he said the cut came as no surprise, as the group seeks to protect oil prices from falling demand.
“That’s what they do,” he said. “But it’s certainly not good news for the US economy.”