Mohamed A. El-Erian , Columnist

The Federal Reserve Continues to Fall Behind the Curve

The central bank demonstrated it was at least paying attention to economic developments, but it’s compounding an unnecessary risk.

June 17, 2021 at 2:49 PM UTC

By Mohamed A. El-Erian

Mohamed A. El-Erian is a Bloomberg Opinion columnist. A former chief executive officer of Pimco, he is president of Queens’ College, Cambridge; chief economic adviser at Allianz SE; and chair of Gramercy Fund Management. He is author of “The Only Game in Town.”

The Fed’s framework is not a “straitjacket,” Chair Jerome Powell says.
Photographer: Susan Walsh-pool/Getty Images

Provide news feedback or report an error

Site feedback:

Take our Survey

This article is for subscribers only.

Some observers have characterized the outcome of the Federal Reserve’s meeting on Wednesday as a “hawkish surprise.” That is only the case if expectations were for a policy deliberation that was blind to what has been happening on the ground. Though it failed to take actual policy actions, the central bank at least demonstrated it has been taking note of recent developments:

All of this speaks to the greater proximity of an inflection point for the Fed’s ultra-loose policy stance and, with that, a greater challenge for Powell to maintain the unity of the Federal Open Market Committee in the quarters ahead.