Allianz Chief Economic Adviser: Rate Hikes Are ‘a Very Violent Shock to the Economy’ and ‘Will Create a Very High Risk of Recession’

Mohamed El-Erian, Chief Economic Adviser at Allianz, also the President of Queens College at Cambridge University joined Poppy Harlow on CNN’s “CNN Newsroom With Poppy Harlow and Jim Sciutto” to discuss the recent Federal Reserves division to raise interest rates yet again to try and fight inflation. He dropped some stark facts that a recession is on the horizon and that the rate hike is a “very violent shock to the economy” that will only increase the chances of a recession happening that will greatly impact all Americans.

“Yes, Poppy It is tragic, because we could have avoided this, but unfortunately, the Fed did not act early enough, so instead of just tapping the brakes, it is slamming on the brakes. Which means that this is not just about higher borrowing costs, this is about a high risk of a recession, this is about 401(k)’s valuations being destroyed. So there’s a lot of what Chair Powell calls pain, what I would cause significant damage to Americans because the Fed has been so late,” El-Erain states.

Watch clip above via CNN