The US was headed for a recession that was “entirely avoidable,” says chief economist

(The Hill) – Mohamed El-Erian, chief economic adviser to Allianz, said Sunday the US is headed for a recession that is “absolutely avoidable” amid ongoing concerns about inflation and economic stability.

“I’m concerned that we are risking a very high probability of a damaging recession that was totally avoidable,” El-Erian told CBS’s Face the Nation, arguing that the Federal Reserve made mistakes that “will go down in the history books.” will. ”

“Inflation is wrongly characterized as temporary. By that they meant it’s temporary, it’s reversible, don’t worry about it. That was mistake number one. And then mistake number two when they finally realized inflation was stubborn and high. They didn’t act. They didn’t act wisely,” El-Erian said.

The Federal Reserve has hiked interest rates to try to curb inflation amid mounting worries about a potential recession.

The United Nations last week warned of a global recession as international economies take action to curb inflation. A survey released last week found that nearly 9 in 10 global CEOs expect a recession next year.

“Even [Federal Reserve] Chair Powell has gone from finding a soft landing to a soft landing and is now talking about pain. And this is the problem. That’s the cost of a Federal Reserve being late. Not only does it need to overcome inflation, but it also needs to restore its credibility,” El-Erian said of the economic institution.