El-Erian Predicts Fed Rate Hike at June FOMC Meeting

The transcript discusses the inadequacy of the current monetary framework, suggesting that the inflation target of 2% is inappropriate. It argues for a higher inflation target until credibility is established. The Federal Reserve is criticized for being overly dependent on short-term data, which suggests a rate hike despite policy measures having a lag. Concerns about the Fed's credibility and its reluctance to admit policy lags are highlighted. The discussion concludes with anticipation of upcoming CPI and payroll data before the Fed's June decision, with expectations of a rate hike.

What does the speaker suggest about the current monetary framework?

• It should remain unchanged.

• It should aim for a lower inflation target.

• It needs to be recognized as inadequate.

• It is perfectly adequate.

Why does the speaker believe the Federal Reserve might hike rates?

• Because they are overly data dependent.

• To decrease inflation immediately.

• Due to a lack of data dependency.

• Because they are confident in their policy measures.

What is the Federal Reserve concerned about according to the speaker?

• Decreasing interest rates.

• Improving employment rates.

• Increasing inflation.

• Losing credibility.

What upcoming economic indicators are mentioned before the rate decision?

• Consumer confidence index.

• Stock market trends.

• GDP and unemployment rate.

• CPI and payrolls.

What is the speaker's prediction regarding the Federal Reserve's action in June?

• They will eliminate rates.

• They will hike rates.

• They will maintain current rates.

• They will lower rates.