Mohamed A. El-Erian , Columnist

Buoyant Markets Need to Keep an Eye on Four Risk Factors

Stocks and bonds are off to an exuberant start to 2023, but there is still plenty of uncertainty about the world’s growth, inflation and policy prospects.

January 17, 2023 at 10:00 AM 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.”

Investors should be cautious about the forces driving the new year’s rally.
Photographer: Michael M. Santiago/Getty Images

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Financial markets have started the new year in a buoyant mood, bolstered by an elusive alignment of stronger global growth prospects, falling inflation and less hawkish central banks. The broad-based rally in asset prices and the resulting loosening of financial conditions have opened the way for issuers to tap the capital markets for funding at quite attractive levels relative to those in 2022.

The sustainability of this encouraging configuration is not yet assured, however. Four issues in particular require close monitoring by investors.