Inflation is stuck and the Fed can't lower prices without damaging the economy, top economist Mohamed El-Erian says

• Inflation looks to be stuck above the Fed's target rate, top economist Mohamed El-Erian said.
• December inflation accelerated more than expected, to 3.4% on an annual basis. 
• If the Fed lowers inflation to 2% too quickly, it risks "crushing" the economy, El-Erian has warned.

The Federal Reserve's inflation fight has hit a wall, and central bankers can't lower prices in the economy any further without causing damage, according to top economist Mohamed El-Erian.

The former PIMCO CEO and Allianz chief economic adviser pointed to the recent December inflation report, which showed prices rose 3.4% year-over-year. That's a faster pace than what was recorded in November, when prices grew just 3.1%, according to the Bureau of Labor Statistics.