On Friday’s broadcast of the Fox News Channel’s “America Reports,” economist, President of Queens’ College, Allianz Chief Economic Adviser, and former Obama Global Development Council Chair Dr. Mohamed El-Erian said that it will be “very hard” to get inflation from its current rate down to the 2% target and doing so will require trade-offs because we have moved from a deflationary environment to an inflationary one because we’ve shifted from “deregulation, liberalization, fiscal prudence” to “industrial policy, government intervention, and fiscal irresponsibility.” And because of a lack of globalization.
El-Erian said, [relevant remarks begin around 1:15] “What they call the last mile, which is getting from around 3.5% inflation to 2%, which is the target, is going to be very hard, and it will include trade-offs. Why is this very hard? First, domestically, things have changed. We used to be in a deflationary environment, deregulation, liberalization, fiscal prudence. Now, we have industrial policy, government intervention, and fiscal irresponsibility. So, the domestic environment has changed. The global environment has changed. We are no longer globalizing, we are fragmenting the global economy. So, if you look at the environment, you’re trying to overcome a lot of headwinds when those were tailwinds.”
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