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 should the monetary framework recognize according to the speaker?

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What inflation target does the speaker consider to be the wrong target?

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What does the speaker suggest should be aimed for until credibility is established?

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Why does the speaker believe the Fed will hike despite the lag in policy measures?

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What does the speaker imply about the Fed's confidence in its operations?

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