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Business Insider: Economist Has Warned the Fed's Rate Hikes May Fail to Squash Inflation - But Could Tank the US Economy and Job Market Anyway

September 19, 2022
Market Crash and Recession

Article by Theron Mohamed in Business Insider

Mohamed El-Erian has raised the prospect of a worldwide economic disaster in the form of slowing growth, stubbornly high inflation, and surging unemployment.

"Lower US growth and a late Fed forced to raise 75 basis points for a record third consecutive time are consistent with global stagflationary tendencies," he tweeted on Saturday. "Wouldn't surprise me to see further growth revisions."

Allianz's chief economic adviser was referring to Goldman Sachs trimming its US GDP growth forecast for 2023 from 1.5% to 1.1% last week. The investment bank predicted the Federal Reserve will roughly double its benchmark interest rate to between 4% and 4.25% by the end of this year.

"Stagflation" describes a toxic combination .......

To read this article in Business Insider in its entirety, click here.

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