(Yahoo Sports) - Top economist Mohamed El-Erian has underscored how inflation has eroded the financial security of Americans, noting that the poorest have been hit the hardest.
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Findings from the Fed's 'Economic Well-Being of US Households' report show how Americans' sense of financial security has been damaged by inflation, Mohamed El-Erian said.
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The top economist noted that the poorest Americans have been hit particularly hard by elevated consumer-price pressures.
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While US inflation cooled to 4.9% in April from last year's peak of 9.1%, it still remains way above the Fed's 2% target.
Top economist Mohamed El-Erian has underscored how inflation has eroded the financial security of Americans, noting that the poorest have been hit the hardest.
The chief economic adviser at Allianz has repeatedly criticized the Federal Reserve for reacting too late to an inflation surge that started in 2021, and then unleashing a series of sharp interest-rate rises last year as consumer prices surged the most in four decades.
The US central bank raised interest rates for the 10th time in a row this month – from near-zero last March to upward of 5% today. While inflation cooled to 4.9% in April from last summer's peak of 9.1%, it still remains way above the Fed's 2% target.
El-Erian highlighted commentary from the Fed's report titled Economic Well-Being of US Households in 2022. The report draws from the results of the latest Survey of Household Economics and Decisionmaking (SHED) conducted in October 2022, which suggested that Americans' sense of financial well-being fell sharply and was among the lowest levels recorded since 2016.
"This sobering survey summary comes from the Federal Reserve's report on the 'Economic Well-Being of U.S. Households in 2022,'" El-Erian tweeted on Tuesday.
"It is yet another indication of how much inflation has undermined the financial security of Americans, hitting the poorest particularly hard," the economist added.
The survey showed more American adults were spending more than they were earning in a month in 2022, compared to the year before. Also, more individuals reported an increase in their credit card debt. Fewer people felt their retirement savings plans were on track, compared to the year before -- suggesting heightened concerns about future financial security.
"The declines in financial well-being across these measures provide an indication of how families were affected by broader economic conditions in 2022, such as inflation and stock market declines," the Fed's report said, as mentioned in El-Erian's tweet.
By Zinya Salfiti
