Influential economist Mohamed El-Erian identifies inflation as the primary reason for the President Joe Biden-led administration’s low approval ratings on economic performance despite positive growth and job figures.
What Happened: In response to queries on why the U.S. administration is not faring well with voters on economic matters, El-Erian attributed the discontent to inflation’s impact.
In a post on X, formerly Twitter, he highlighted three key inflation-related issues: The erosion of purchasing power due to inflation peaking at 9%, the inadequate decline of inflation rates and the aggressive interest rate hikes that have affected affordability in housing.
“The recent decline in inflation has not been deemed as sufficient relief given that the rate is still positive at a time when many confuse dis-inflation with prices going,” he added.
See Also: No Rate Hike: Fed Maintains Interest Rates At 5.25%-5.5%, Keeps Future Options Open
Why It Matters: The persistence of high inflation rates has overshadowed the reported growth and employment gains, leading to dissatisfaction with how the economy is being managed.
El-Erian’s comments reflect a broader concern that despite positive economic indicators, the lived experience of consumers, influenced by inflation and interest rates, drives public opinion.
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