The onset of debilitating stagflation within the US economy is likely “unavoidable” even if the Federal Reserve manages to avoid a full-fledged recession, famed economist Mohamed El-Erian warned on Wednesday.

El-Erian, the chief economic adviser at Allianz, indicated that stagflation would take hold despite the Fed’s plan to aggressively hike interest rates to bring down decades-high inflation that hit 8.3% in April.

“[A recession] is not unavoidable but unfortunately the probability is going up. What is unavoidable is stagflation,” El-Erian said during an appearance on Bloomberg. “We’ve seen growth coming down and we’ve seen inflation remaining high and the Fed is finally catching up to developments on the ground, but it still has some way to go.”

Stagflation is a term that refers to periods where inflation remains stubbornly high even as economic growth slows or becomes stagnant. Periods of stagflation can also include high unemployment.

El-Erian said US stocks are likely to turn even lower in the days ahead — continuing a lengthy losing streak triggered by investor fears that the Fed won’t be able to engineer a “soft landing” while raising rates.

Slowing economic growth has yet to be fully “priced in” to a market that has already experienced steady selloffs over inflation and Fed rate hikes, according to El-Erian.

The Allianz economist also took the Fed to task for its initial hesitance to tackle inflation — with Fed Chair Jerome Powell among those who once insisted the problem was transitory in nature.

El-Erian said the current rise of stagflation was “avoidable” if the Fed were quicker to act.

“Stagflation is the worst thing for central banks, especially for the Fed, because it puts its two objectives in conflict with each other.”

So far, the US job market has remained strong despite signs of an economic slowdown. The national unemployment rate is just 3.6% and employers had a record 11.5 million job openings in March.

However, inflation sapped workers’ gains during their time of high leverage by effectively erasing wage gains through higher costs for daily necessities such as food and fuel.

El-Erian has warned of higher economic risks for months, asserting in mid-March that the Russian invasion of Ukraine could exacerbate the problem and drive inflation close to 10%. At the time, he suggested the Fed had lost credibility because it was “very late” to addressing the situation.

The criticism echoed remarks made by ex-Fed Chair Ben Bernanke earlier this week.

Bernanke, who led the US economy through the Great Recession in the late 2000s, said the Fed’s slow response “was a mistake” based on misreading of key economic indicators.