El-Erian Says Fed Should 'Go for 50' Basis-Point Hike at Next Meeting

The transcript discusses the debate over whether to downshift to 25 basis points or stay at 50, with arguments supported by different economic data. The speaker personally favors 50 due to concerns about inflation becoming sticky around 4% mid-year. The discussion also covers the concept of pace versus destination in economic policy, emphasizing the risks of linking the two and suggesting that a slower pace with a longer duration may not be ideal.

What are the two main interest rate options discussed in the debate?

• 20 and 40

• 30 and 60

• 25 and 50

• 15 and 35

Which data points support the argument for a 25 basis point interest rate?

• Housing market trends

• Stock market performance

• Retail sales numbers

• Labor market data

Why does the speaker prefer a 50 basis point increase?

• To align with market expectations

• To manage inflation before it becomes sticky

• To address labor market issues

• To boost economic growth

What is the main focus of the pace versus destination discussion?

• Balancing short-term and long-term goals

• Linking pace to economic growth

• Determining the ultimate destination

• Deciding on the speed of policy changes

What is the potential downside of linking pace to destination?

• It could result in excessive inflation

• It might tilt too much on the downside

• It may cause market instability

• It may lead to rapid economic growth