(CNBC) - Ahead of the release of the latest consumer price index reading this week, Allianz chief economic adviser Mohamed El-Erian told CBS “Face The Nation” on Sunday that he predicts the headline inflation “will probably come down to around 8%”, but that core inflation “continues to rise”.
Core inflation is what measures the drivers of inflation and their magnitude. So El-Erian said an increase in core inflation means “we still have an inflation problem.”
Even though core inflation is still on the rise, El-Erian said it will eventually come down.
“The question is, is this accompanied by a slowing economy or a major recession?” he said on “Face the Nation”.
Oil producer group OPEC+ on Wednesday announced its biggest supply cut since 2020, and El-Erian said the move “hurts the United States” because it risks causing a further increase in oil. inflation. But he said the drop was not a surprise as the group seeks to protect oil prices from falling demand.
“That’s what they do,” he said. “But that’s definitely not good news for the US economy.”
By Rajesh Khanna
October 10, 2022
