Federal Reserve must do more than raise rates by 75 points
“For its sake and that of both the domestic and global economy, the central bank desperately needs to regain control of the inflation narrative. The persistent failure to do so in the past 12 months is turning the perception of the Fed from the world’s most powerful central bank — long respected for its ability to anchor global financial stability — to an institution that too closely resembles an emerging-market bank that lacks credibility and inadvertently contributes to undue financial volatility.”
USAGOLD note: That lack of credibility and contribution to volatility usually goes hand in hand with a deteriorating currency. We were surprised that El Erian went so far as to compare the Federal Reserve to a troubled emerging-country central bank. If Larry Summers is the leading critic of current Fed policy, El-Erian is a strong number two.