On Monday’s broadcast of ABC’s “GMA3,” economist and President of Queens’ College Dr. Mohamed El-Erian said that we will get out of the current bad situation with inflation “by this time next year” but because the Federal Reserve has been late to act, doing so will require “sacrificing some economic growth,” although he believes that getting inflation under control can still be done without triggering a recession.
Co-host Amy Robach asked, “[I]f they [the Federal Reserve] do what you’re suggesting they should do, continue to raise those interest rates, how long before we’d be out of this current bad situation?”
El-Erian responded, “So, we will be out of the inflation situation by this time next year. The question that is on everybody’s mind is what is the cost of getting out of it? At one time, we were hoping for what’s called a soft landing, which means you lower inflation without sacrificing economic growth. Now, unfortunately, because the Federal Reserve has been so late, we’re going to end up sacrificing some economic growth, but we can still do so without falling into a recession. And that’s going to be the key issue to watch.”
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