US Economy Slowing Faster, Broader Than Anticipated, Says Mohamed El-Erian

Mohamed El-Erian, Queens' College Cambridge president and Bloomberg Opinion columnist, explains why it would be a mistake for the Federal Reserve to cut by 50 basis points in September. His opinions are his own.

--------
More on Bloomberg Television and Markets


Connect with Bloomberg Television on:

Connect with Bloomberg Business on:

More from Bloomberg:


Watch more on YouTube:

[yuzihao]

Lol this guy was saying everything is good two months ago

[philipchamp]

In my opinion, things are slowing down faster and more than anyone wants to admit. You drive on the interstates nowadays compared to traffic one year ago. It’s a big difference. Just not as many cars.

[nickvin]

Literally 4 weeks ago he was touting one of the best economies of all time.

[mgvable]

We need more workers who can do the work. Supply change is still low go food shopping three times a week bc shelves are empty not enough flights are drivers hotels are a mess even the gardening service are having trouble getting supplies to wait for dirts for three months is nuts

[eyelovecolorado]

The entire panel owns a home outright because none of them see that housing costs (rent/mortgages) are so out of bounds for the past 3 years! A rate cut will increase housing costs for sure. What a pickle the Fed created by having rates so low for so long! 😢

[randyharmon]

This is one smart cooky I’ve been listening to this guy for years and it appears that he’s right a majority of the times. My own opinion he nailed it with Wall Street pundits trying to intimate the Feds. These high priced and incompetent people have one priority and that’s there own pocket book. Let’s change those individuals and run them out of town get some really smart people with a goal of getting this country’s financial spending under control without bankrupting our citizen.

[sushibar]

The Fed was too slow in raising rates years ago, and has been too slow lowering rates now. Congress needs to take a real look at what it is about the Fed that makes it so slow to learn. It was obvious as far back as 2014/2015 that rates needed to be raised. Not a lot, but keeping them at basically 0 for over a decade was simply foolish. It has also been clear for probably a year now that increases should have stopped, and at least small reductions should have been made. Dr. El-Arian's comment that a .5% reduction would be the Fed admitting to a policy mistake, and therefore it shouldn't do it is nonsense. Admit your mistakes and correct them. The Fed should have lowered its benchmark rate by .5% this week, and signaled that another cut would be likely in September. Not announcing a rate cut at the meeting this week was just plain obstinance. The economy and the country will pay the price.

[KungPowEnterFist]

If the Fed was late to start hiking, it was by a meeting or two at most. Yes, inflation showed up in mid-2021, but unemployment was nearly 6% around that same time. It was not until November 2021 that unemployment suddenly dropped to near 4% and then combined with the high inflation the Fed had clear signal to start hiking. The same thing will happen at the back end because the data is always lagging. Go ahead and tell us your crystal ball can see the future. A meeting or two late to start cutting means the Fed is right on time.

[kurdik]

Store closures all across the nation, including bankruptcies. I believe the Fed missed it once again. I am afraid the unemployment avalanche already started.

[peterponcedeleon]

Central planning by the FED always backfires. The idea that we can prevent downturns by printing momey is nonsense. The FED will lower rates and inflatiomn will go back up. And prices will spike. Thgen what?

[AH-fmrj]

US economy is on morphine. US is spending with 7% deficit and they say everything is fine 🤣

[bobslate]

Home prices have not come down much in last 2 yrs if they cut a full percent in next 12 months prices will start climbing again.

[artvandelay]

It's either incompetence or it's treachery. And if it's incompetence, why are they still there? 🙈🙉🙊

[chuckb]

Problem is Powell's data & conclusions have serious lag. So as he is coming in for the landing in piloting 'his' airliner, he is sits and waits for his delayed altimeter to work, but doesn't detect the actual high rate of change. Meanwhile all the passengers in 'economy' class are yelling "just look outside, pull up!". Inter-meeting cut may surprise.

[windsongwong]

The big elephant in the room is the $35 Trillions in public debt.
Financing it at 4% will be tough….

[Android-xpfj]

I don't get it. If there actually is a strong economy, why would it slow down when the rate has been kept at the same rate for the past year? Strong economy at 5.5 should still be strong at 5.5. Imo, there never was a strong economy.

[sobrmonkys]

A bit late... Huge signs were screaming for an August or earlier .25 cut and started prepping in July

I was calling for a .25 cut n see for months just cause a rate of 5+ is still hearty but a small trim creates breathing room

[RafaelBeltran-ol]

should not cut any interest points, keep it as is, till the end of the year, only rich people, millionaires, and billionaires want cut rates. So they can get richer.

[ferone]

They need to engineer a little more theft first.
Less employment = more delinquency = more asset transfer and consolidation.
Not until peak asset forfeture is achieved will interest rates be lowered.
This means all assets. Homes, banks, businesses, equipment, etc.
I'm not talking about catastrophic levels of asset transfer here. That might start to look a little too ovbious. 😉

[JCSY]

Not slowing down BUT more like falling faster and faster.