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Opinion
Mohamed A. El-Erian

Why Investors Are Facing Even More Market Instability

Traders were already dealing with three economic and financial paradigm shifts. Then the Fed and the UK government cast a pall on policy making.

Traders and investors didn’t need even more uncertainty.

Traders and investors didn’t need even more uncertainty.

Photographer: Spencer Platt/Getty Images

Frequent flyers are accustomed to turbulence on some flights. Indeed, many expect it. Despite such anticipation, however, the turbulence can once in a while create significant anxiety among even the most seasoned travelers.

This is what happened in markets last week. The “expected” turbulence, related in large part to three continuing paradigm shifts, was turbocharged by two less-anticipated factors, whose duration will play an important role in determining the orderly functioning of markets.