Top Economist Says Supply Chain Issues Could “Contaminate” Demand


Mohamed El-Erian, chief economic advisor for financial services firm Allianz, said on Sunday the top cause of concern in the US economy should be supply chain problems, warning that persistent problems could “contaminate” demand for products.

Fox News Sunday host Trace Gallagher noted that initial reports indicated that Black Friday sales weren’t particularly strong and asked economists if it was simply because shoppers were expecting disruptions earlier this year the supply chain should buy.

“People have been worried about supplies for the past two months. We saw a big surge in retail sales that came earlier than many people expected, so I think some people have accelerated [those] Purchases, “said El-Erian.

“I don’t think we have a demand problem. I think the incomes are strong. Retail sales are strong. The companies have a lot of money. The problem is the supply side, ”he continued. “And if we don’t fix the supply side, the demand side will be contaminated. So it’s really important to focus on the two big problems we have: supply disruptions and inflation.”

On inflation, El-Erian shot back at comments from government officials calling inflation “temporary”.

“I think it’s time for the Fed to change course. And I felt that if someone didn’t repeat that inflation is fleeting, don’t worry, it can be done.” gone, “said El-Erian, referring to Federal Reserve Chairman Jerome Powell, who was nominated for a second term by President BidenJoe BidenGOP plans to oust Democrats from their seats if the House of Representatives reverses the Taiwanese president despite Chinese objections Sunday shows a preview: New COVID-19 variant emerges; Supply chain problems and inflation remain MORE last week.

“Inflation is not temporary and it is really important for the Fed to realize this because the worst that can happen is that in addition to the supply disruptions, there is nothing we can do, in addition to labor shortages, they are destabilizing our expectations.” and we’re changing behavior even faster, “he added.

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