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Mohamed El-Erian

This Month

Major issues both candidates need to tackle.

Five economic headaches the new US president must tackle

Whoever wins, the new US administration must find a way to maintain growth while repositioning the economy.

August

The Bank of England announces its voting splits on the day of the decision.

Central banks need true transparency not fake consensus

The Bank of England isn’t afraid to advertise its differences. That is better for creating trust than the obsession with a united front at the US Fed.

July

The Labour Party and its leader, Keir Starmer, have gone further than the Conservatives in detailing structural reforms.

UK needs ‘moonshot’ growth agenda

After so many years of insufficient investment and sagging productivity, there is no singular, silver-bullet reform to achieve buoyant, durable, sustainable and inclusive economic growth.

June

Trump has made it clear that he doesn’t trust Federal Reserve chair Jerome Powell.

Fed needs to cut interest rates sooner not later

The delay by the US central bank in easing monetary policy could jeopardise a soft economic landing.

May

The US is now the sole engine of economic growth again.

Why the world won’t respond to shocks as it did before

The world economy is fragmenting, with countries going in different directions. They will not react to frequent violent changes in the same ways.

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April

Iranian worshippers chant slogans during an anti-Israeli gathering after Friday prayers in Tehran, Iran.

Markets are a frog in boiling water on Iran-Israel

The latest round of Iran-Israel hostilities has crossed many lines and durably raised the geopolitical temperature in the region. Yet markets seem keen to brush this aside.

March

Workers assemble sneakers in a Jinjiang factory.

Shaky China is not a long-term bet for investors

The world’s second-largest economy faces a clear and present danger of falling into the middle-income trap.

February

The sell-off should not be too easily dismissed.

Inflation sell-off is a wake-up call for traders

Markets had embraced, with too little critical thinking, the narrative of a quasi-automatic, very soft landing leading to both large and early Fed rate cuts.

January

Central banks can stop disasters, but they cannot create new growth.

Global faith in the central bank lever is misplaced

Markets and commentators are buoyant in expectation of interest rate cuts this year. But they are overestimating how much power central banks really have over economic outcomes.

December 2023

San Francisco skyline. Highly leveraged sectors, such as commercial real estate, are suffering.

The Fed should resist market bullying

The risk is that, to avoid unsettling market volatility, the Fed validates the market loosening with sizeable rate cuts but is forced to reverse course later.

Despite economic bills passed by President Joe Biden’s administration, dwindling household savings and higher debt cast a shadow over US growth outlook for the coming year.

Upbeat predictions for global economy are not cause for optimism

The main concern is that too many policymakers seem more focused on reinvigorating inefficient growth engines than shifting towards more sustainable, forward-looking models.

November 2023

Former US Federal Reserve chairman Alan Greenspan.

Federal Reserve officials talk too much

It’s no wonder forecasters and traders show little hesitation in consistently ignoring the central bank’s guidance, including for policy rates.

October 2023

Fed boss Jerome Powell’s next opportunity to check bond volatility will be on November 1.

The Fed pivot that turbulent Treasuries need

At a minimum, US policymakers need to shift from backward-looking data to combining data dependency with a clearly articulated economic vision.

August 2023

The economy, the markets and the Fed still need to navigate what’s already in the pipeline from the handful of items that, more than two years ago, helped initiate the current inflationary episode.

Good news on US inflation comes with an asterisk

While there is certainly a lot to like in the latest CPI report, there is also need for greater care in simply extrapolating its path.

Volatility is being driven, and likely will continue to be, amid the prospects of significantly higher debt sales by the US government.

What US Treasury volatility means for the economy

While the shifts in yields on US government debt are likely to diminish, Mohamed El-Erian argues they will not disappear.

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A Chinese EV factory: growing the old way is not longer working.

The world economy can’t just muddle through any longer

China’s mishandling of the post-global era finally shows that a fresh model is needed.

A vendor waits for customers in a Beijing store. China’s growth challenges are both cyclical and secular.

There’s nothing comforting about the global economic outlook

Signs of apparent convergence are multiplying in economic and financial domains. We should do our utmost to moderate the pull of the reassuring narrative.

  • Updated

July 2023

A restaurant worker in the City of London. The drivers of inflation are more complex and diverse than just wages.

Just blaming wage growth for inflation is misleading and dangerous

The UK inflation debate now focuses excessively on wage-push inflation, where providers of goods and services pass on higher wage costs to consumers. This is unfortunate.

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This is why central banks need more scrutiny

June was a tough month for the masters of monetary policy. And in the face of a stubborn trilemma of challenges, they need help to restore credibility.

June 2023

inflation

Fed poised to give ‘muddled’ rate decision

A ‘skip’ at this week’s policy-setting meeting may be the worst of three imperfect policy options.

Original URL: https://www.afr.com/by/mohamed-el-erian-p4yviy