El-Erian Warns ‘Economic Accident’ Would Precede Any Central Bank Pivot

Sees more volatility as tightening spurs financial instability
Central banks won’t allow higher inflation without ‘more pain’

Mohamed El-Erian, chief economic adviser at Allianz and Bloomberg Opinion columnist, says liquidity risk needs more attention and expresses his concerns about central bank interventions during an interview with Jonathan Ferro on “Bloomberg The Open.” El-Erian’s opinions are his own.Source: Bloomberg

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By John McCorry and Jonathan Ferro

September 30, 2022 at 4:45 PM UTC

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Mohamed El-Erian has a cautionary word for anyone anticipating an end to interest-rate increases from the Federal Reserve and other central banks.

“All of you who are looking for a pivot, be careful what you wish for,” the chief economic adviser at Allianz SE and Gramercy Funds chairman told Bloomberg Television’s The Open on Friday. “This pivot only happens if you have an economic accident or a financial accident. And the journey to an economic accident or a financial accident is a very painful journey.”