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 inflation overall “probably down around 8%”, but this core. inflation “still rising”.
Core inflation is what measures the drivers of inflation and its breadth, so El-Erian said an increase in core inflation means “we still have an inflation problem.”
While core inflation is still rising, El-Erian said it will eventually come down.
“The question is, does it shrink with a slowdown in the economy or a major recession?” he said on “Face the Nation.”
Oil producer group OPEC+ announced its biggest supply cut since 2020 on Wednesday, and El-Erian said the decision “hurts the US” as it risks pushing inflation back up. But he said the cut was not a surprise as the group seeks to protect oil prices in the face of declining demand.
“That’s what they do,” he said. “But it’s certainly not good news for the American economy.”