Allianz's El-Erian comments on Fed moves, Biden and oil

Allianz Chief Economic Advisor Mohamed El-Erian says that the Fed is having to "choose between one of two mistakes." El-Erian also said the Biden administration's decision to release emergency U.S. crude "helps" fears of double-digit inflation, "but it doesn't remove them". He speaks to Francine Lacqua and Dani Burger during Daybreak Europe.

[johnrussell]

His last sentence was all I need to hear. El-Erian is a brilliant guy.

[Internetjim]

Is it just me or is this guy and Roubini the only people that can talk straight and know what is actually going on?

[centralscrutinizer]

If raising rates .5% 2 times kills the market you didn`t have a very healthy market to begin with .The market was pumped by stimulus, Qe (money printing) and fed buying MBS . If you take that away it crashes, regardless of prime rate. Raising rates just makes it happen faster.

[wise]

Very insightful and prescient interview.

[texassecession]

From 2004-2006 Jan, the Fed raised the federal fund rate from 1% to 4.5% and we had the yield curve inversion. The rate went further upto 5.25% before we had a recession starting Sep 2007. This time, the Fed raised only 0.25% and now we have the inversion. And the Fed plans to raise 6 more times. Definitely, the current economy is less resilient than 2006. You know the major storm is coming.

[aethermass]

I love this man. The fact that he thinks is probability distributions is his best trait.

[rodrigocortes]

Nothing wrong with taking chips off the table.

[arodriguez]

The Fed needs to raise rates above inflation, reward people for saving and punish the irresponsible.

[labandonaldhock]

The US is still short 2 million barrels a day, but have raised Russian purchases by 40%

[chrisnamaste]

A mild recession is EXACTLY what is needed to stamp out inflation and deflate the asset bubble. Raise rates to 1.5% NOW. Then add .25% every 60 days for 9 months or until inflation hits below 3.5%. This Fed behavior is crazy and killing savers near retirement!!

[harlyslamm]

I loved reading his article in 2011 that we have to be used to risk off for a long time and then again in April 2020 that we can expect the markets to break March lows...

[riodejaneiro]

The RUBLE was the Best investment in march.

[Coco-ywnf]

Fed officials heavily invested in stock market, insider trading etc and Jerome looks the other way.He is a culprit also

[Gilmourist]

rates need to go much higher much faster.

[mauricesar]

The man is shivering cold just to show up the landscape.

[stighelmer]

So we are saying that MMT isnt working anymore?

[adrianholmes]

Great sound quality... perhaps stick to zoom.

[kevintewey]

" what used to be a risk is a baseline Goldilocks is .... is moved to be right now completely out of the distribution"
" recession has come in; I don't think the release of the oil will significantly change that distribution"
😐😖😢

[abbkell]

An economy built by enough time dispears by slow motions. An economy built by an artificial mechanisms of all terms in no time, meaning in about two hundred seventy six years, you can't expect this is real and strong foundation that can last longer and so the way the economy has been built, falls down the way it was built.

[brett]

So the fed is late on inflation. If they move to fast they create a recession. The market wants the fed to move slow. By moving slow they won’t stop inflation. We seem to be going around in circles. So the fed has a problem. Sounds like the fed needs to move fast and the markets need to deal with that. The markets and housing have had a great run with near zero interest rates. It was never going to last forever. The markets and housing need to reset back to normal rates. Remember markets and housing probably should never had of had a massive boom during a pandemic in the first place and recessions should of be common. All the fed did and every other central bank around the world did was kick the, lifting interest rates, inflation, recession can down the road a little. Should central banks have done nothing at the beginning of the pandemic. Definitely not. But everyone should expect a pretty sick economy after a major once in a lifetime pandemic.