El-Erian: Fed Has No Choice But to Raise by Half-Point

Mohamed El-Erian, a Bloomberg Opinion columnist, says the Federal Reserve's long-term policy decisions will get harder. He speaks with Jonathan Ferro on "Bloomberg The Open." El-Erian's opinions are his own.

[dukeiout]

The Fed has 100s of PhD in Economics but they didn’t see this coming. When Powell said inflation was transitory last summer, my jaw dropped. I’m an idiot without a degree in Economics, but common people like me could see inflation running out of control last year with housing up 30% Y/Y. When gov dropped money from helicopters (stimulus checks, zero interest rate, fed MBS & treasury bond purchases) and it chased after limited supply of goods, inflation was obvious.

Everyone wants free money, student loans cancelled. No one has to work to produce goods and services this free money is chasing.

Fed policy was just dumb and reckless.

[vyaspadhuk]

El Erian .... A layman like me can clearly understand the complicated economics... Because of the way you explain

[mand]

Mohd E.E always with the truth and facts.

[karlopeternel]

The best what FED can do is to go behind bars in the prison

[st_eunice]

Will they be fired for being “late” and causing all this mess or they will receive awards?

[luvon]

FED is probably gonna surprise even more to the hawkish side.

[chrismillson]

The current situation in the country is really disturbing, I am confused if i should sell or hold on to my stocks. please i need your honest suggestions on what to do to avoid losses.

[fishtherapy]

How many times are they going talk about a 0.5% rate rise?

[pmapires]

Main fear now for investors should be the return of capital not the return on capital. Investors need to spot which currencies are going to be hyperinflated and avoid those like the plague. The dollar might end up being the last man standing unless the FED flip flops and then gold will be king.

[pmapires]

The best thing for the FED now is to deliver its promise without flip flops (50+50 then series of 25s). What it looks like is that currencies of those without credibility will be savaged following the fear from the crazy stance of BoJ that's hyperinflating its currency, which apparently will be followed by the ECB which is bluffing the market for months now. In the current context protecting the credibility of the dollar looks to be a strong asset for the near future.

[ellisbozzolo]

The Fed talks and talks and talks and does nothing thinking the talk alone will solve the problem.

[marcbirkholtz]

Powell took the view that supply chains were the major problem and would start normalizing around about now.
Seemed like a reasonable argument at the time.

[Dinngg]

The half point increase ship has sailed. No decision at all. Most likely will be same in June as well.

[junyongpark]

Think a The Gold Standard & Capitalism

[johnpatman]

Looks like reads a lot of books, he must be very smart. We can believe everything he says.

[kevinyaucheekin]

Soft land, be Honest soft landing is a fevered opium pipe dream. Capiche

[generemotebookkeeping]

A 50 basis point rise in rates will collapse Japan and Europe. Negative interest rates will cause their currencies to Break!

[drew]

All i know is the Fed better call off tightening and raising rates or none of these discussions matter anymore. Data is souring at a staggering pace... if he truly is data dependent he better wake up soon or its gonna get downright scary

[biulaimh]

If inflation keep rising, interest rates must keep rising. Ultimately, interest rates must get higher than inflation in order to make investing in bonds viable or depositing money in a bank, viable. I don`t think it is going to happen. The risk of crashing the stock market is too high. If the stock market doesn`t crash but just continues it`s bear market trend, the FED is like to move so slowly that inflation will continue to outpace interest rates indefinately. So what is the answer? The government should (but won`t) slash spend drastically. The FED should (but won`t) hike interest rates well into double digits - fast. But by not doing these things, inflation will continue rising and will probably accellerate. Foreign stocks cannot be confiscated if the US government gets desperate so they are an option. What can we do at home? My suggestion would be to invest in solar panels and a security system for your home. If you have land, drill for ground water and start growing your own food. I would also buy silver coins.

[TehDeeBjorn]

Why is this El--Erian always on TV..he is so negative and he thinks he knows everything. Time for his '15 mins of fame' to be over.