(OPINION) Former President Barack Obama’s chief of global development on Tuesday predicted inflation was here to stay, despite the Biden administration’s protestations to the contrary.
Prices “will go higher, and the Fed has misread the inflation dynamics in a big way,” former Global Development Council Chairman Mohamed El Erian said in an afternoon interview with Fox News’ Sandra Smith, adding that the Federal Reserve was “still hostage to this notion that it’s transitory.”
“The first thing it should do is stop injecting $120 billion every month,” he said, referencing the Fed’s monthly purchase of Treasury securities and mortgage-backed bonds aimed at encouraging heightened levels of consumer borrowing and spending.
“It should stop that. Do we really need the Fed to buy $40 billion of mortgages and push house prices even higher? No!” Biden administration officials have vacillated between denying inflation will persist into the future and offering other arguments in its defense,
including one offered by former Obama economist Jason Furman, who stoked controversy this month when he commented on Twitter that inflation was a “high-class problem.” White House Chief of Staff Ron Klein retweeted the comment in a show of support, provoking further outrage among administration critics. READ MORE