Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Allianz Advisor El-Erian Predicts Stubborn Inflation Above Fed Target

EditorVenkatesh Jartarkar
Published 11/11/2023, 11:57 AM
© Reuters
GS
-
ALVG
-
FED
-

In a recent interview with Bloomberg, Mohamed El-Erian, the chief economic advisor for Allianz (ETR:ALVG), provided his insights on the inflation outlook, contrasting with more optimistic views from other financial institutions. El-Erian forecasted a significant drop in inflation rates but cautioned that figures would likely stabilize around 3%, exceeding the Federal Reserve's goal of 2%. This prediction diverges from Goldman Sachs and similar firms that anticipate sharp disinflation and low recession risks for 2024.

El-Erian attributed the expected persistence of higher inflation rates to supply-side challenges and shifts in business practices brought on by the pandemic. He suggested that these factors could lead to sustained high prices, even as headline inflation had seen a year-on-year increase of 3.7% by September, slightly surpassing the projected 3.6%. Core inflation, which excludes volatile food and energy prices, was reported at 4.1%.

The Federal Reserve has been actively trying to curb inflation with a series of interest rate hikes since March 2022. However, according to Minneapolis Fed President Neel Kashkari, these efforts have not been sufficient, indicating that further actions may be necessary to bring inflation down to desired levels. El-Erian's comments add to the ongoing debate among economists and policymakers regarding the trajectory of inflation and the effectiveness of monetary policy measures in addressing it.

InvestingPro Insights

In the context of the inflation outlook and its potential effects on the financial market, it's worthwhile to take a closer look at Allianz (ALVG), the company for which Mohamed El-Erian serves as the chief economic advisor.

InvestingPro's real-time data reveals a strong financial position for Allianz, with a market cap of $93.04 billion and a P/E ratio of 10.45 as of Q2 2023. Notably, the company has seen a revenue growth of 2.44% over the last twelve months, further solidifying its robust financial health.

Two InvestingPro Tips particularly stand out. First, Allianz has a perfect Piotroski Score of 9, indicating a healthy financial situation. Secondly, the company has consistently maintained dividend payments for 32 consecutive years, showcasing its reliability and commitment to its shareholders.

These insights, combined with more than 11 other tips available on InvestingPro, provide a comprehensive overview of Allianz's performance and potential in the current economic climate.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.