Mohamed El-Erian: Hoping the Fed delivers two rate cuts starting July

요약 보기

연준이 인플레이션 끈적임에도 금리인하를 할 수 있으나, 구조적 공급 부족으로 인플레이션은 3% 수준에 안정될 것이라고 봄. 7월부터 두 차례 인하를 기대하며, 중동 긴장 확대는 제한적이라는 시장 인식에 우려를 표함. 물가 3% 수준은 경제·시장에 큰 장애가 아니며 2% 목표는 임의적이라고 주장.

다듬은 글

※ 자동 자막 원문(다듬기 전)

01. well joining us now Muhammad larian is chief economic adviser at Alan and it's great to have you here Muhammad wonderful to be here thanks for having me um we see the markets sort of unclenching a little bit I mean obviously part of Friday's decline seemed to be anticipation of what might happen uh in terms of this anticipated attack that did come to fruition uh but then of course doesn't seem to to necessarily be carrying through to animate today's market action so what are we left with bond yields going back toward their highs of last week we're repricing what the FED might do we've had to digest these hotter than expected inflation numbers uh what's the thing you're most focused on so first I think it's fascinating that the market has concluded a fact and a hypothesis the fact is that the damage over the weekend was contained the hypothesis is that there will be no further escalation that is very different from what the National Security people are telling you and us in terms of we've crossed a new line it's the new Middle East so I think the market is willing to put that aside and be comforted by three things one is that we will continue to see productivity enhancing Innovations advance two is that the FED at the end of the day will be accommodating two markets and three is that soft Landing is the most likely Baseline and it's a good thing for the marketplace in the short term to have those three things but we should listen to the National Security people because I do think things have changed in the Middle East you mentioned those three things they certainly are underlying the premise of where the markets have gotten to this year now of course I'm looking at the S&P 500 it's only picking up a third of what was lost on Friday we are still a few percent below our highs it seems as if the Outlook has become a little bit less clean at least even from a macro perspective given the way people are wondering if the FED is going to kind of get get itself into a corner here and not get through the easing that it wants to so we've been pricing in something that we've discussed for a while and and that that i' I have felt for a while is that inflation is going to Pro sticky that the last mile is really complicated and that we're not sure what the fed's reaction function is If the Fed remains data dependent then the FED will be more hawkish than it needs to be and that the market expects it to be if however the FED looks forward and to use Steve Leeman's phrase Embraces more of an inflation framework and model then it will deliver on the two cuts this year so the marketplace is having to price in this reality that inflation is sticky but I'm still unclear where you are so I am hoping that the FED will be less data dependent I am hoping that they will look forward realize that the economy is weakening and deliver on two cuts starting as early as July that is what I'm hoping but then if the FED does do those two cuts and inflation has been stickier and does come back with a vengeance wouldn't that be kind of wouldn't people blame the FED for acting too prematurely is that in their minds at all so the key issue you've said come back with a vengeance so my my macro model my macro Paradigm is we are living in a world of insufficiently flexible supply side very different from the world we lived in after the global financial crisis where there was enough demand that insufficiently flexible Supply calls for a slightly higher inflation Target the FED cannot declare a higher inflation Target because it missed so long and by so much so what we're going to do is we're going to see this phrase longer term come in before they talk about the inflation Target and we will settle at an inflation at around 3% and I suspect it is stable I suspect it doesn't de anchor inflation expectation so the other bit of your of your thing that inflation comes roaring back all 70s that doesn't happen well I mean it it is worth reminding folks that you know first of all pce inflation is their target it's under three it's probably going to stay under three they only think it should get to 2.6 by the end of the year from 28 let's say uh in order for them to get those cuts in um the other thing is through the span of History inflation plus or minus two and a half 3% is not necessarily a big impediment right to the economy or to the markets that's absolutely right and I would add to that 2% is totally arbitary Target right we only have 2% because back in 1991 the Bank of New Zealand adopted 2% right that's why we have 2% so yes all that you're absolutely right Mike