Mohamed A. El-Erian , Columnist

January’s Market Volatility: Blip or Omen?

For the rough ride, investors can blame the large and persistent deviations among systemically important countries when it comes to economic performance and monetary policy prospects.

February 2, 2015 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.”

Shaky markets.
Photographer: Spencer Platt/Getty Images

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January was an unusual and exciting month for financial markets.

Volatility returned to the equity markets. To use a rather unsophisticated measure, almost three-quarters of the trading days showed moves of more than 100 points in the Dow Jones Industrial Average. Yields on higher quality government bonds plummeted; 10-year Treasuries ended the month at 1.64 percent and Germany's 10-year rate touched a record low of 0.298 percent. Meanwhile, the foreign exchange markets were marked not only by notable fluctuations in currency values but also by changes in exchange rate systems for stability-obsessed countries such as Singapore and Switzerland.