Economics
El-Erian Says Liquidity Trade Replaced Trump as Market Catalyst
- Investors can look to emerging markets to manage risk, he says
- Economist laments ‘bad news’ in U.S. participation rate
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Mohamed El-Erian, Allianz SE’s chief economic adviser, said the rally in stocks and high-yield bonds is part of a “liquidity trade,” based on optimism that central bank stimulus efforts and the accumulation of corporate profits will sustain market gains.
“That is what you’re betting on,” El-Erian said Friday in an interview on Bloomberg Television. “You’re not betting on the Trump rally anymore. You’re not betting on the reflation trade anymore.”