El-Erian: Saying a Recession Will Be Short and Mild Is 'Same Trap' as Saying Inflation Was 'Transitory'
On Wednesday’s “PBS NewsHour,” economist and President of Queens’ College Dr.
Mohamed El-Erian said he thinks a recession is “probable,” but not a total certainty, and those confidently asserting that a recession will be a short and mild one “are falling into the same trap as they did with transitory inflation, trying to make bad news good news.” El-Erian stated, “I hope we don’t end up [in] a recession. I’m not in the camp that says it’s 100% likely. It’s probable, but it’s not certain. But if we do fall into it, Geoff, it’s very hard to assert that it will be short and shallow. Those who are saying it will be short and shallow with confidence are falling into the same trap as they did with transitory inflation, trying to make bad news good news. So, I tell you we’re going into a recession, they say, oh, don’t worry, it’s short and shallow. We don’t know. And we’ve got to be very careful. But the major issue now is to avoid going into a recession.” Follow Ian Hanchett on Twitter @IanHanchett.
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