It is time to recognize that the speed with which interest rates are going higher for longer, while needed to curb inflation, significantly increases the risk to financial stability. If only all the earlier talk of transitory inflation, soft landings and immaculate disinflation had not delayed policymakers’ reactions and the associated repositioning of markets.

Now that time is no longer in its favor, the Fed will need even greater skill, and a lot more luck, to navigate such a complex inflation-growth-stability configuration.     

Mohamed A. El-Erian is a Bloomberg Opinion columnist. A former chief executive officer of Pimco, he is president of Queens’ College, Cambridge; chief economic adviser at Allianz SE; and chair of Gramercy Fund Management. He is author of The Only Game in Town.

This article was provided by Bloomberg News.

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