Don't Expect Fed Jerome Powell To Adjust Inflation Target!!! says Mohamed El-Erian

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01. alrighty guys and this one we're gonna be having Muhammad elyrian giving his predictions on the FED meeting at Jackson Hole this Friday based on the title that says don't expect Fed chair pal to adjust the inflation Target doesn't seem like he's projecting much change as always if you guys enjoy the video hit the like button and let's jump on into it yeah it's chief economic advisor Mohamed elari and Muhammad what a treat to have you back good morning good morning Carl all right so you laid out some possibilities talk to me about what's likely so what's likely is that he's probably gonna talk about short-term monetary policy issues I don't think that's the best thing to do because it is a very delicate situation right now the good news for Jeff Powell is that this is a target Rich environment whether he chooses to focus on the immediate whether he chooses to focus on the longer term or whether he decides to punt as others have done in the past and look at a very narrow economic issue with no policy implication he has a lot to talk about Carl and that just shows you how fluid the current situation is Right speaking of Target Rich um you you probably don't Envision any attempt to make adjustments to the inflation Target or do you I'm just thinking in light of uh that reminds me make sure you guys tune in to my channel on Friday I will be having an entire video of the whole fed meeting next piece in the journal over the weekend about our star well there's more and more people saying look if we were to decide on inflation Target today it would not be two percent it would be slightly above that and I think that's a very strong argument for that having said that it is very hard for a central bank to change its inflation Target when it has been missing it so consistently so yes there's a theoretical article argument for a higher inflation Target but don't look for chair pal to touch that issue in any significant way interesting Muhammad I wanted to uh turn your attention to China I know you you were tweeting overnight that the news and just the overall sentiment in the region is a reminder that old-fashioned I'm quoting you here old-fashioned stimulus measures are not as obvious or as easy of a go-to for the government as they used to be at this point in time do you see any additional stimulus from the region as they try to to at least improve GDP in the region to kind of what the market expectations are look Leslie they have two issues they have a growth problem and they have a debt problem and because they have that second issue don't look to them to do major stimulus you know the market was hoping for more but they didn't deliver more it's not because they're not worried about economic growth they're very aware about economic growth they're very worried about youth unemployment over 20 percent the reality is that they cannot use the old-fashioned stimulus measures what they need is a fundamental revamp of their growth model and that's not coming anytime soon are there any takeaways yeah China's economy is going in through something insane right now but the overall thoughts on the FED meeting at Jackson Hole on Friday it's going to be about the guidance how long are we going to stay this elevated are we done raising rates are we gonna how high are we gonna go if we're not done and if we are done how long are we going to stay paused if we're not going to stay paused how fast are we going to go down so there's going to be a question from regardless about what he has to say the markets are going to instantly price it in because it's so forward-looking if it's anything more hawkish than forecasted it's not going to be nice for the markets now that we've got this one green day up it can be deleted very very quick if we get some hawkish fed pal on Friday the ways you think for other nations who have employed kind of infrastructure spending in the way that they have obviously here in the US we have been embarking on on a lot of spending a lot of fiscal spending um you know in certain pockets of the economy do you think it's there are lessons to be learned here or just a different situation altogether now there are lessons this is a important time to redirect economic growth look what's happening around us we have a green transition that we have to take seriously we have fragmenting globalization Supply chains are changing and certain countries like ours have tight labor markets and when you look at that you need a major emphasis on the supply side and Carl was asking earlier about U.S exceptionalism U.S exceptionalism is not just in economic performance which is significantly better than most other countries but also in the approach taken to Future economic growth potential there's been a major emphasis on revamping the energy equation to make it Greener to make investment in growth areas and I think other countries are looking at that and they're jealous of us because they don't have the ability to do what we've been able to do think all the other countries are jealous of America too so Muhammad aliri installs on the FED he does not expect Fed chair pal to adjust inflation targets he thinks he's going to leave him alone he thinks it's too fragile of a topic he thinks he's going to push it to the next meeting or a couple of days away we're about to find out tomorrow we've got a quiet day in the market Wednesday we've got Nvidia earnings Thursday a little bit of Jackson Hole and then Friday we've got the Jackson Hole meeting guys just a reminder again on this channel I'm gonna have the whole entire Jackson Hole meeting I hope you guys enjoyed the video as always peace