Economist Mohamed El-Erian reportedly predicts that the economy is entering into a "vicious cycle" as coronavirus cases surge and economic activity slows.
The only thing that will break that cycle is more policy efforts, he recently told Bloomberg TV.
‘We are looking at a high probability of a vicious cycle. Public health is deteriorating… policy is not doing anything. The economy is slowly going into recession in Europe, and people are becoming more hesitant to interact socially and economically,” the Newsmax Finance Insider said.
"Unless we move on policy and health, you and I unfortunately will be talking about this vicious cycle," for quite some time, the Allianz chief economic adviser told Bloomberg.
El-Erian said the seemingly endless bull stock market also will probably continue undeterred.
“I’m a believer that there’s a limit to how much you can disconnect Wall Street to Main Street,” El-Erian told Bloomberg on Friday. “Having said that, you’ve got to respect the technicals.”
And those technicals, he said, are “very strong” thanks to central banks that have provided “an umbrella that has protected the financial markets from all sorts of things.”
El-Erian isn't alone in his pleas for economic help.
Warren Buffett said on Tuesday the United States is fighting an "economic war," and that Congress must step up to help struggling small businesses that have become "collateral damage" from the coronavirus pandemic.
Speaking on CNBC television, the billionaire chairman of Berkshire Hathaway Inc said he hopes Congress extends the Paycheck Protection Program of business loans "on a large scale."
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