Tags: El-Erian | Fed | World | Slowdown | Risk

El-Erian: Fed Comments Show Unease About World Slowdown Risk

Sunday, 12 Oct 2014 07:12 PM

Federal Reserve policy makers’ recent comments about the threat to the U.S. expansion from a global slowdown that’s rattled financial markets underscore growing concern among central bankers, according to economist Mohamed A. El-Erian.

Fed Vice Chairman Stanley Fischer indicated Saturday at the International Monetary Fund’s annual meetings in Washington that slower-than-anticipated overseas growth could prompt the U.S. central bank to put off an interest-rate increase.

Fed Governor Daniel Tarullo also said he was troubled by the weaker state of the world economy, while European Central Bank President Mario Draghi spoke of continued bias toward easier monetary policy.

“What that is is the nervousness among central bankers, that if asset prices come down, then that is going to affect the real economy,” El-Erian, who writes a column for Bloomberg View and is chief economic adviser at Allianz SE, said on the Fox News program, “Sunday Morning Futures With Maria Bartiromo.” “What we’ve seen this weekend in Washington, D.C. is the number of central bankers, they said, ‘Don’t worry, we will be more patient.’ But the real question is, is that enough?”

Investors are having their doubts. The Standard & Poor’s 500 Index posted its biggest weekly drop in two years and the Dow Jones Industrial Average erased gains for the year.

“What the market is starting realize is that central banks only build bridges, they can’t guarantee destinations,” El- Erian said. “We need the other policy makers to step up and unfortunately they are not. Central bankers alone can’t do all the heavy lifting.”

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Federal Reserve policy makers' recent comments about the threat to the U.S. expansion from a global slowdown that's rattled financial markets underscore growing concern among central bankers, according to economist Mohamed A. El-Erian.
El-Erian, Fed, World, Slowdown, Risk
253
2014-12-12
Sunday, 12 Oct 2014 07:12 PM
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