According to Jinshi Data, well-known economist El-Erian said that the possibility of the Federal Reserve cutting interest rates in September is threatened by the inflation shock after the US election.
El-Erian pointed out that two factors complicate the prospect of a rate cut in September: one is the possibility of poor economic data, and the other is political factors.
He believes that the United States will not see a situation similar to that of former British Prime Minister Truss, who caused market turmoil due to his budget plan.
El-Erian expects the Fed’s “biggest concern” is that inflation will reaccelerate and it will have to reverse its rate cuts and restart rate hikes.
He added that the possibility of the Fed raising interest rates next year is low, but it cannot be completely ruled out, and interest rates may be raised due to major external shocks or policy changes.
