El-Erian Urges Fed Patience on Rate Cuts Despite Market Pressure, Citing Ongoing Inflation Risks

• The Fed should wait "a couple years" before cutting rates again, says top economist Mohamed El-Erian, due to sticky inflation • El-Erian warns that cutting rates too soon raises the risk of inflation spiraling out of control and stagflation • He notes the Fed's inflation target is 2% but underlying inflation is still above that, citing factors like supply chains and the strong labor market • Markets expect the Fed to start cutting rates in June, but El-Erian says the Fed shouldn't follow the markets' outlook so closely
• El-Erian has warned the Fed in the past about tightening financial conditions too quickly and risks of recession