Mohamed A. El-Erian , Columnist

Yellen's Shrinking Room for Maneuver

Expectations of a hike in March moved to more than 80 percent in a few days.

March 3, 2017 at 7:00 AM UTC

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.”

Following the betting.
Photographer: Aaron P. Bernstein/Blooomberg

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Whether the Federal Reserve decides to hike or not when its policy-making committee meets on March 14-15, the movements in fixed income this week should serve as a warning to all those who have grown to believe -- wrongly as it turns out -- that the central bank is destined to follow markets rather than lead them.

Indeed, the dramatic repricing of market expectations of an interest hike in March -- from close to 30 percent to more than 80 percent in just a few days – may even force the hand of Chair Janet Yellen when she delivers a speech on Friday.