Posted 1/12/2024, 7:30:00 PM
Inflation Stays High at 3.4% Despite Fed Efforts, Risking Recession if Lowered Too Quickly
- Inflation rose faster than expected in December to 3.4% annually, showing prices remain stubbornly high
- Top economist Mohamed El-Erian warns inflation could get "stuck" around 3-4% due to persistent economic pressures
- El-Erian says Fed risks "crushing" economy if tries to lower inflation too quickly just to hit 2% target
- Tight job market fueling wage growth remains an inflationary pressure that is difficult to rein in
- Fed now faces choice between accepting 3% inflation for now or trying to slash it quickly, threatening a recession