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Mohamed A. El-Erian

The Fed's Goldilocks Problem

The central bank wants markets to get used to a little more churn, but not too much more.
Get me the Fed.

Get me the Fed.

Photographer: Andrew Burton/Getty Images

In recent days, equity markets have been whipsawed by wild and rapid fluctuations, including a 588-point decline of the Dow Jones Industrial Average on Monday (after a dizzying day of swings that spanned about 5,000 points), an exceptionally abrupt downward reversal late Tuesday, and Wednesday's 600-point intraday swing that culminated in a frantic rally to the close. The bond markets also have exhibited notable volatility: Ten-year Treasuries have traded in a 25 basis-point range in the last four days alone.

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