Tags: El-Erian | risk | central bank | Fed

Pimco's El-Erian Sees 2014 Risk, as Central Banks Try to Hand Off Growth to Private Sector

By Dan Weil   |  

Many experts say the biggest risks surrounding the global economy and financial markets next year will center on central bank policy.

The Federal Reserve, for one, already has announced that it will begin paring back its massive easing program, cutting its monthly bond purchases by $10 billion to a total of $75 billion.

Pimco CEO Mohamed El-Erian says central banks will have a tricky time shifting from "policy-induced growth to higher, durable and more inclusive private sector-led growth," he told the Financial Times.

Editor’s Note:
Opinion: Retirees to Be Hit With Social Security Cuts

"In each case — that of the Fed, the European Central Bank and Bank of Japan — the policy transition is complex. It involves changes in an already highly experimental policy mix."

As for the Fed, even as it announced its tapering of quantitative easing earlier this month, it stressed that short-term interest rates would remain at record lows — near zero — for some time.

"The biggest risk for 2014 is definitely the risk of the Fed getting it wrong," Didier Saint-Georges, an investment committee member at money manager Carmignac Gestion, tells the Times.

Meanwhile, as Fed Chairman Ben Bernanke nears the Jan. 31 end of his tenure, experts give him mixed marks for the Fed's stimulus program.

Former White House adviser Larry Summers defends Bernanke. "If [he] had not maintained a loose orientation to monetary policy, we could have easily gone back into recession" after 2009, the Harvard professor tells The Wall Street Journal.

Editor’s Note: Opinion: Retirees to Be Hit With Social Security Cuts

Related Stories:

© 2015 Newsmax Finance. All rights reserved.

1Like our page
2Share
Economy
Many experts say the biggest risks surrounding the global economy and financial markets next year will center on central bank policy.
El-Erian,risk,central bank,Fed
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
© Newsmax Media, Inc.
All Rights Reserved