Ahead of the release of the latest consumer price index this week, Allianz Chief Economic Adviser Mohamed El-Erian told CBS ‘Face The Nation’ Sunday that he predicts inflation “will likely drop to around 8″ %”, but the core inflation “is still rising.”
Core inflation is what measures the drivers of inflation and their magnitude, so El-Erian said rising core inflation means “we still have an inflation problem.”
However, even if core inflation is still rising, El-Erian said it will eventually ease.
“The question is does it go down with the downturn of the economy or a major recession?” he said on “Face the Nation.”
OPEC+ Oil Production Group announced the biggest supply cut since 2020 on Wednesday, and El-Erian said the decision “doesn’t hurt the US,” as it risks causing inflation to rise again. However, he said the cuts are not surprising as the group is looking to protect oil prices as demand falls.
“That’s what they do,” he said. “But that’s certainly not good news for the US economy.”
