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00:00What is the feasible set right now for the American Central Bank. I think at best they're feasible said is what Chef Paul called a soft Tish landing. And the issue is really important. I think the time has passed for a soft landing. We could have done it but that would have implied the Fed moving nine months ago. It should have. It didn't. So instead of tightening into a growing and dynamic economy it is tightening to a slowing economy. So it is very difficult to get a soft landing. So the best you can hope for right now is a soft tissue landing. What's the probability of that happening. Not as high as I would like it to be. I think the Fed is going to have to decide between two policy mistakes hit the brakes too hard and risk a recession or tap the brakes in a stop go pattern including right in September will be an example of that and risk having inflation well into 2023 etc.. Larry and Olivier Blanchard was talking about Stan Fisher and Saudi was our great North Star which is extraordinarily statement about the gentleman of 1998. We have a conceit now that our currencies are more floating. Can the release bill for Chairman Powell as he approaches the feasible the dollar dynamics because we have a more open more floating currency system. It's not open enough in the U.S. economy for that look. The solution to all issue is a surge of productivity. If we get significant productivity growth we can reconcile all sorts of difficult tradeoffs. So the key issue is whether we get a surge in productivity. And you can get that with all sorts of things happening underneath. It will be wonderful for example to also have labor force participation go up especially among that. That would help. It will be wonderful to have supply chains improving that good health. Is all that going to happen in the short term. Very unlikely unfortunately. Mohammed you're talking about how a soft ish landing is looking like the most best. Ouch. I mean it looks not that likely. Do you think that the recent data that we've seen and frankly the assumption in markets that momentum is waning and that the Fed's already getting what it's wants do you think that that's gotten ahead of itself or do you think that they're onto something. But there has been already a slowing that will make it easier for the Fed. So I think the marketplace is going through a a process. One is a dip was overdue. We had eight weeks of successive declines. And clearly there are people who are finding bargains and the single name bargains. And the fact that we've had the largest inflow into the equity markets globally for the last 10 weeks is significant. We are seeing their bias. So you have a very technical reaction after eight straight weeks that I totally understand. What I don't understand is the notion that suddenly the Fed would be able to hike twice and then and then take it easy and pause. The only reason as I said earlier that happens is if demand collapses and if demand collapses equities I'm not going to do well. You saw what happened when Target announced that they were being impacted not just on the cost side but also on the revenue side because of high inflation. And the last thing this equity market needs right now. Right. And someone earning.

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El-Erian: 'Stop and Go' Fed Risks Extending Inflation's Run

Mohamed El-Erian, a Bloomberg Opinion contributor, says the Federal Reserve faces a decision between two "policy mistakes" after failing to contain surging US inflation. "The Fed is going to have to decide between two policy mistakes," he says on Bloomberg Television. "Hit the brakes too hard and risk a recession or tap the brakes in a stop-go pattern and risk having inflation well into 2023." (Source: Bloomberg)

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