Mohamed A. El-Erian , Columnist

Inflation Selloff Is a Wake-Up Call for Traders

The drop in stocks and bonds points to important challenges faced by the Federal Reserve and investors in the months ahead.

February 14, 2024 at 4:02 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.”

Bumps ahead.
Photographer: Angela Weiss/AFP via Getty Images

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It’s tempting to dismiss the response to Tuesday’s inflation data as an outsized reaction to a slight miss in numbers that are particularly vulnerable to seasonal noise. Yet the development is also indicative of deeper issues whose influence may well be with us for the next few months and quarters.

Consumer prices rose in January by more than expected for both the headline and core measures, over a monthly and annual horizon. While this clearly constituted “data misses,” they were small deviations from consensus projections that could well have reflected seasonal dynamics. Still, the media and market reactions were considerable.