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00:00Well, you know what the Fed implies right now in its projections? Median forecasts right now. Unemployment goes to four and a half percent. Rates stay here, implied by the median debt and inflation is on a glide path back towards tech. How would you characterize those forecasts from the Fed? They get updated in June, by the way. You know, I would characterize understand where I've characterized almost every single forecast we've had for the last few years as hopeful, but not realistic. We haven't talked about the third part of the tri lama financial stability. All right. So there are three elements that do, and that's what you get when you're late. Is your dilemma turned into trial? And we have to talk about financial stability as well. So, look, unless the Fed comes out and anchors quickly. The markets way in terms of what is its characterization of the medium term, we're going to get more and more differences, not fewer. We come back and forth on the regional banking stress. I've called it a crisis. You've called it something else. We won't debate that here and now. We've talked about several slices of it. What size is that? Are we in at the moment? So we are out of the ICU. That was the acute phase. We are still in the hospital because there are problems with the banking model of certain banks. And the key issue now is to allow the patients that are in the hospital to come out. And if you if there are if there's another policy mistake, the patient goes back into the ICU. What would a policy mistake look like if, for example, we ignore the fact that we can't get to 2 percent inflation easily and we go after Rich too quickly. That would put the patient back into the ICU and would bring back a second set of patients that we don't talk about the non banks. What's happening in the nonbank financial sector? What do you think is happening then right now? So the good news there is it's slow moving. So think of commercial real estate. Think of the one point five trillion that has to be refunded. That doesn't happen immediately. That's the good news. You don't have the dynamic of deposits. The bad news is that's going to happen over time. So we've got to be really careful to not to navigate what's coming.

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El-Erian Says Fed Forecasts 'Hopeful, But Not Realistic'

Mohamed El-Erian, chief economic adviser at Allianz and Bloomberg Opinion columnist, says the Federal Reserve's projections for US employment and the path of inflation are "hopeful, but not realistic" on "Bloomberg The Open." (Source: Bloomberg)

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The only daily news program focused exclusively on technology, innovation and the future of business from San Francisco. Hosted by Emily Chang.
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