El-Erian: Likelihood of Fed rate cut in September threatened by post-election inflation shock in US
Well-known economist El-Erian said that the possibility of the Federal Reserve cutting interest rates in September is threatened by the post-election inflation shock in the United States.
El-Erian pointed out that there are two factors that complicate the prospect of a rate cut in September: one is the possibility of bad economic data, and the other is political factors.
He believes that the U.S. will not see a situation similar to that of former British Prime Minister Truss who caused market turmoil due to his budget plans.
El-Erian expects the Fed's "biggest worry" is that inflation is accelerating again and have to reverse the rate cuts and restart rate hikes.
He added that the Fed next year, the possibility of a rate hike is very low, but can not be completely ruled out, may be due to major external shocks or policy changes and rate hikes.
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