The alarm bell rang the famous economist Mohamed El Erian after the current data on inflation in the US, saying that the country is now heading towards a crisis of cost of living.
“It’s just a matter of time before we start talking about a cost-of-living crisis and that’s how things are,” Allianz’s financial adviser and president of Queens’ College in Cambridge told CNBC.
It is recalled that the data released today in the US showed that the consumer price index moved at a rate that exceeded estimates in April, as it increased by 0.3% on a monthly basis and by 8.3% on an annual basis, while the market waited +0 , 2% and + 8.1% respectively.
For the first time in recent months, however, it did not reach a new high of 40 years, but it moved even slightly downwards.
But as Mr. El Erian pointed out, “everyone is focusing on the size of core inflation and that is understandable, but look at the structural one at 6.2%, and look at the composition of inflation that suggests that there are many drivers right now.” .
The structural index, which does not include energy and food in the measurement, increased by 0.6% on a monthly basis when the market expected an increase of 0.4%, which shows that the increase in prices is more widespread now.
“It’s not just about the war in Ukraine anymore, it’s a broad-based inflationary course that the Fed has largely lagged behind,” said Mohamed El Erian.
Source: Capital

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