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Mohamed El-Erian Olivia Michael | CNBC Calling inflation “transitory” was a historically bad move for the Federal Reserve, according to Allianz Chief Economic Advisor Mohamed El-Erian. “The characterization of inflation as transitory is probably the worst inflation call in the history of the Federal Reserve, and it results in a high probability of a policy
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The Fed this week will announce acceleration of QE tapering. With inflation approaching 7%, policymakers would likely revise its view on inflation outlook and “retire” the word “transitory”. The updated economic projections and median dot plots showing members’ interest rate projections would also be released. The Fed funds rate will stay a 0-0.25% until mid-2022.
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A risk-on market mood boosts risk-sensitive currencies like the British pound, the JPY falls. Traders’ mood turned negative when the US inflation crossed the wires, thought later improved. GBP/JPY Price Forecast: Has a neutral-bullish bias, though downside risks remain. The British pound pares some Thursday’s losses during the New York session gains 0.31%, trading at
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