El-Erian 'Terrified' of Central Banks Losing Autonomy

"I am terrified that if central banks don't own their mistakes...people are going to say 'You're not accountable enough,'" Mohamed El-Erian, a Bloomberg Opinion columnist, says during a panel discussion in Washington. El-Erian's opinions are his own.

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[JohnDaniels]

"The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented."
-Sir Josiah Stamp, former Bank president

[JohnDaniels]

"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless." - Thomas Jefferson

[inflationking]

The FED beeing independent is a complete joke. Yellen and Powell are the perfect love couple

[sangEta]

Independent? LOL Don't make me laugh, the last Fed chairwoman currently runs the US Treasury!

[slovokia]

Central banks have too much power given their limited knowledge of how the economy works and their ability to allocate resources in ways that should really be the purview of the fiscal authorities. I for one would take away much of their discretion to engage in asset purchases. QE that is never unwound is just defacto monetization of government debt. All it does is encourage governments to be profligate and keep interest rates artificially low giving market participants inaccurate signals about the true burden of debt.

[TrondJohannessen]

Left on the Single Mandate, and totally uncaring about the Maximum Employment mandate. Lives in a world where he denies that the Fed let the inflation run until the post-covid economy was at Full Employment. The Fed IS politically controlled and accountable through the Dual Mandate and its broader and more general mandate of financial stability. It is a consistent battering of the Fed on being late in raising rates, and never a word of why that was. NEVER ever expressing admiration for the Fed's effort with Treasury to return 15 or 20 million (depends on measure) people back to work, as COVID response contained the financial disaster of a pandemic lockdown, paralyzing enterprises and the economy at large. NEVER recognizing that COVID response QE was re-engineered to NOT put the US economy back on a deflationary path, as it was during the decade after the Great Financial Crisis of 2008. It was planned inflation, obviously another risky bet as QE was following 2008 with Chair Bernanke. I never hear Chair Powell not recognizing they made and will make errors, nor does he claim they have crystal balls. Still, for someone like El-Erian who never projects anything, never has to be accountable for a single forecast, throwing stones at the Fed has become an obsession, and it is shameful that Allianz funds the charade of Fed bashing at a time when we can see that none of the bashers have other than mud on their faces, as their dire predictions keep being shamed, as the exact point of attack - the letting the stimulus run for six more months after inflation started moving the needle - is what now defers recession and permits the economy to accomodate the inflationary response. It is growing like China on the nominal front, with somewhat higher inflation. For anyone able to duck the energy side, this is a gold rush. Large data centers do not escape, so large scale tech is hurting, as is people-intensive industries as the energy component is reflected in the core products of the general economy. The engineering of this would have been impossible with El-Erian at the Fed, and recession would have been deep, with low nominal growth and high inflation, as the energy component did not depend on Fed policy - it was running up way before the Ukraine war, and certainly not a result of stimulus per se.

[karamsulaiman]

“Interest rates will be 4 percentage points lower by the end of the year”….

NO THEY ARE NOT!!! There is no market pricing that in!!!

[ff-]

CB have dissolved currencies purchasing power in the last 100 yrs and we want to protect them? How can this genius call it "their mistake"? That was their primary job description!

[LarryLunchbox]

I wish I was smart enough to understand what the hell he said

[carloskleiber]

Ask him about his native Egypt
He should be TERRIFIED about that desaster

[paxundpeace]

Wise men but the FED reserve is just doing what they want.