El Erian spoke on US TV over the weekend (CBS’s “Face the Nation”), saying that the Fed’s insistence on calling inflation transitory is

• probably the worst inflation call in the history of the Federal Reserve

And went on:

“It results in a high probability of a policy mistake,”

“So the Fed must quickly, starting this week, regain control of the inflation narrative and regain its own credibility. Otherwise, it will become a driver of higher inflation expectations that feed off themselves.”

El Erian says the Fed should cut back on the liquidity it is providing ASAP.