The Fed's over-dependence on data risks financial instability, Mohamed El-Erian wrote in a recent op-ed for Bloomberg.
He says the central bank became too focused on inputs after misreading inflation in 2021.
AdvertisementThe Federal Reserve's strict adherence to data is sapping it of policy alternatives, economist Mohamed El-Erian wrote for Bloomberg on Friday.
Many central bank officials want to see a clear disinflationary trend in the data before cutting rates.
He expects the Fed to keep rates unchanged through 2024, citing that neither inflation nor the US economy is sufficiently cooling.
Persons:
Mohamed El, Erian, —, Torsten Slok
Organizations:
Bloomberg, Service, Fed