El-Erian Warns Bond Market It's Underestimating March Fed Odds
- Allianz adviser says he sees March chances at 50-60%
- Futures indicate market-implied probability closer to 30%
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Mohamed El-Erian, Allianz SE’s chief economic adviser, is warning traders not to get complacent about the prospect of a Federal Reserve interest-rate hike next month.
Given the minutes from the Fed’s Feb. 1 meeting and recent economic data, the market’s implied probability of an increase in March "seems too low," El-Erian tweeted Wednesday. He said a probability of 50 percent to 60 percent appears more appropriate.