Mohamed El-Erian Sees ‘All Sorts of Damage’ If Fed Hikes Rates

Mohamed El-Erian, Queens' College Cambridge president and Bloomberg Opinion columnist, says the likelihood of the Federal Reserve hiking interest rates is low, but not zero. His opinions are his own.

[@Falconlibrary]

That's a lot of words to say "Wall Street wants its free money back but I don't know what's going on."

[@tedstriker6743]

If I see this guy on again I’m never watching Bloomberg again. He’s clearly motivated only by his own personal greed and corrupted being paid to offer dovish sentiment for the likes of corporations. He could care less if inflation is robbing everyday Americans of their savings and hard earned pay

[@danielhutchinson6604]

Preserving the illusion of Stability that the FED assumes they have created, takes a lot of Drama. The fact that the G-7 Nations are now limited to 30% of available resources on the planet, the struggle to convince Consumers that the USA still control more than that, is becoming a chore. Without Consumer spending keeping the Western Economy looking like it can continue the coarse they began 30 years ago, becomes more complex every Year. After the former colonies discovered the shelter of the BRICS Wall, they seem to enjoy the independence? Covid was assigned the blame, then the "Supply Chain" became the focus. The fact that the former Colonies of the G-7 Colonial Empires, now formed into a large Trade Union seems to limit the resources that are needed to provide the stability that is desired........ There went that supply chain....... The Former Colonies appear to be trading among their Peers. They find that concept to be more profitable. ElEian understands the need to provide the drama to distract the Consumers. He was calling for rate increase before most economists. Now He wants to push the "Free Money" philosophy again. That dramatic presentation of Economic stability is what gets ElErian back on NBC programs

[@Mcllwain]

What I don’t understand is, on one hand we are told the stock market will crash and yet on the other we are told ways of investing in the stock market. Oxymoron or paradox? I'm considering investing over $700k, but I'm uncertain about risk mitigation strategies.

[@kurttSchuster]

Everyone needs a Margin of Safety in their portfolios and just remember, It's time in the market versus timing the market.

[@eastwood224]

De-risk your portfolios, shore up your core holdings, and take some profits while balancing your portfolio allocations. I’d also suggest you go with a managed portfolio, but even those don’t perform so well, so it’s best you reach out to a proper fiduciary to guide you, that’s what works for my spouse and I. We've made over 80% capital growth minus dividends.

[@tonicruger]

Pls who is this coach that guides you? I’m in dire need of one, my stock portfolio is declining even in a bulll market.

[@eastwood224]

AMBER KAY WRIGHT is the licensed advisor I use. Just research the name. You’d find her webpage and necessary details to work with to set up an appointment

[@jgwinnel]

How can he say cuts when that would clearly send inflation soaring? They need to hike.

[@tedstriker6743]

Can we all agree Mohamed is the worst “Bloomberg option guy”! Don’t understand why this guy is always on. He’s clearly motivated only by his own personal greed and corrupted being paid to offer dovish sentiment for the likes of corporations. He could care less if inflation is robbing everyday Americans of their savings and hard earned pay

[@gillis51]

Right now, high rates are fueling inflation by increasing home and rental costs. Central banks knows that and they wish to reduce rates asap but at same time, they can’t do it when energy costs are soaring. Increasing rates further will fuel more inflation and create all sorts of problems for the banking sector. Higher rates are not needed right now cause the problem is not inflation driven by high demand but for geopolitical events. Increasing rates would add to the problem, not solve it.

[@emeraldoramadhan1028]

Who care inflation . Inflation is part of live just cut the rate

[@nunobartolo2908]

High interest rates are preventing deflation technologies like ev adoption from scaling so it’s stupid to not cut also the us government will default if they hike so congress would just fire Powell

[@ibrahimdonmez1983]

I lost respect for El-Arian. Hike the rates. Cut the government spending. Let the recession happen. Inflation is painful. I would rather have a short and powerful pain rather than prolonged weak pain. I wanna get rid of the pain. The inflation is eating America live. We can not cater to Wall Street . The policies should be based on the interests of the American people, not the greed of Wall Street.

[@jeffberg7490]

He does seem to waffle over time between sometimes sounding like a reasonable economist and othertimes wanting whatever policies will placate the markets.

[@Otto876]

Lol so you want people to lose their jobs? Good thing you’re not the Fed Chair.

[@Rikimkigsck]

What kind of...otic comment is that

[@kevinraimond7658]

Mo still slobbering over rate cuts. Rates are where they need to be.

[@tedstriker6743]

Can we all agree Mohamed is the worst “Bloomberg option guy”! Don’t understand why this guy is always on. He’s clearly motivated only by his own personal greed and corrupted being paid to offer dovish sentiment for the likes of corporations. He could care less if inflation is robbing everyday Americans of their savings and hard earned pay

[@nitroneonicman]

Rates need to be higher

[@turbofanlover]

Why the hell would the Fed cut rates now? Makes ZERO sense.

[@High1QWealth]

Because Inflation isn’t caused by low interest rates! High interest rates destroy the lower and middle class

[@theonlycaulfield]

​@@High1QWealthOpposite of the case. Inflation has historically gotten worse when rates have been lowered. Assets inflate with low interest rates, while savings interest earnings relative to currency inflation decreases, which hurts lower classes due to them having more money in savings than assets. It also facilitates ease of borrowing to purchase property, allowing housing to be driven further up. Due to this, saying that high interest rates hurts the lower classes makes zero sense.

[@cremephoto]

Politics.

[@High1QWealth]

@@theonlycaulfield that is blatantly false! Inflation during low interest rates was very low! It only go thigh because of money printing during the entire covid-19 pandemic!

[@High1QWealth]

@@theonlycaulfield You are braindead, high interest rates cause housing prices to go up considering that home builders completely stop building and nobody is willing to sell and then take on higher interest rates in a new property! You have a very very low iq!

[@prolific1518]

This guy is always yapping about rate cuts. Your retirement savings are going to disappear buddy. Stop crying

[@internetpointsbank]

Dude is sad he can't afford the second yaht this year.

[@tedstriker6743]

Can we all agree Mohamed is the worst “Bloomberg option guy”! Don’t understand why this guy is always on. He’s clearly motivated only by his own personal greed and corrupted being paid to offer dovish sentiment for the likes of corporations. He could care less if inflation is robbing everyday Americans of their savings and hard earned pay

[@hwy9nightkid]

"This guy" ? Do you know who that is?? He's not in cash dumbass

[@ed-gn6kl]

“All sorts of damage” right .. like an opportunity for housing prices to come down so young people can afford the American dream like a family and a home. Yeah Can’t allow that. Keep everything inflated

[@AK-qo6tx]

all sorts of damage to the rich get richer crowd.

[@praveenspike]

History is going to repeat itself like when Yellen said inflation was transitory and the Fed was too late to hike interest rates. Fed need to have the interest rates at 8% if it wants to have a smooth inflation fall back without any hiccups.

[@TheGingerjames123]

I'm not aware of any inflationary scenario that went smoothly. Just look at the graph, there is pullbacks everywhere same as any market or asset. It would be miraculous to say the least

[@praveenspike]

@@TheGingerjames123 the world is interconnected with economies, if one breaks the link it has to be replaced by the same value to continue to strengthen. E.g. if America bans Russian crude then there has to be an alternative exporter of the equal value or cheaper else it will force inflation higher

[@Watcher1-jr5lo]

Banks would collapse

[@praveenspike]

@@Watcher1-jr5lo no way around it

[@ssuwandi3240]

Yellen thought it would have been easy to manipulate long duration into short term yield... I wish Elrian would be forward as fixed income expert

[@jeffberg7490]

"The Fed Should maintain its course and cut twice this year" but "the minute they hike by 25 basis points they open the way to hiking more". That a smart guy like Mohamed El-Erian can hold both of these beliefs simultaneously suggests that financial markets are at a point of heightened reflexivity.

[@NopeNope01]

High oil prices are to blame. We need more oil production.

[@mand1009]

Mohd El Erian 👍

[@jbdmb]

Hike rates to 20%. Squash this excess and restore equilibrium.

[@JuaqiemMckelvy3214]

El-Mexican 👏

[@dbrew2u]

We have yet to see the explosion in the Inflation numbers that will happen if a Rate Cut or Cuts were to take place . Rates should hold steady or possibly even rise if prices do not begin Deflating .

[@rajap1578]

Mohammad was saying fed should raise rates so much and keep it high, when they were slow to react, now he is saying they should cut

[@miguelcampbello8983]

Raise the rates

[@marthamclaughlin7010]

they should raise real soon, there must be damage and pain to stop the debt binge

[@mlmoreno75]

The fed should have hikes in the fall/winter.

[@Otto876]

Interest rates were near zero for almost a decade and inflation was under control so the idea that lowering interest rates will spark another bout of inflation is questionable. As long as the the government doesn’t start another helicopter money campaign inflation isn’t going to reaccelerate. Rate cuts may actually be what’s needed to fix shelter inflation

[@jeffotoole4509]

The target is 2%!! How much confidence will you get if they move the goal posts halfway through the game?? There has not been any pain yet. There has to be pain. Getting to 2% will be painful. That’s the point.

[@michaelboguski4743]

Why charge anything for Money? We can all live in Zero World, where there's "money for nothing, and the chicks for free"

[@fkeopfkeop]

They should hike!

[@dalie95327]

10 billion dollars a day being added to the national debt might cause inflation maybe.

[@alech120]

Let him keep speculating!

[@chrisbytwerk3712]

Rates need to stay where they, if not a little higher. Free money is why we're here. Something has to cripple the over spending of the federal government.

[@stanbecks1097]

Lets speculate which leg goes 1st, left or right?

[@MangoFlamingo]

This guy knows all the answers when he is on your show

[@georgemaximus694]

These rate hikes hasn’t done any damage whatsoever. The economy and markets has been doing even better and better. Inflation is “down” and stock market is sky high.

[@theruraloregonian1802]

The only thing for certain is the value of your time, labor, energy and investment will continue to decline

[@AmitKumar-tg7of]

Lisa is one of the smartest presenters on bb

[@user-ol7tl1vf5m]

In a free market, deflation is its natural state. However, the current credit-based system requires inflation to sustain itself, or else it faces collapse.

[@johnrowson2253]

Anticipating change is also important in trying to control change: how many people is a bigger difference, than how many stones.

[@iginlacow]

The difference between now and the FED hiking the rates by .25 BASIS points is the fact that they haven’t done it before so we don’t think they’re gonna do it”

[@locnguyen-jc7wn]

let me break it down for you - If you don't want sovergin debt crisis and bank sovency, the federal reserve needs to cut interest rate. US has over $7 trillion of debt that need to be refinance this year. At this rate and US budget deficit to our eye balls, the interest on the existing debt will consume more and more until it is the biggest expense for us. The federal reserve can't fight inflation without bringing down this house of cards economy. Higher inflation vs great depression? Cutting rate will lead to acceleration of inflation but they don't have any other option. Higher inflation than normal for years to come

[@RWROW]

As a vounteer tax preparer for mostly retired people, I saw their 2023 tax returns finally showed good interest incomes compared with their 2022 and previous returns. Finance shows ought to at least make a nod to the interests of the clients of the financial sector when they discuss interest rate policy.

[@user-rt4vm5xl5p]

The next Fed move will be a hike.

[@marthamclaughlin7010]

why should they cut and help these dr unken politicians spend even more

[@sadns2000]

Lot of words to say that markets want free money. Just print more. Forget about inflation

[@erickanter]

No rate cuts are needed. That guy must be levered to the hilt. Stay the course NO RATE CUTES.!!!!! El-Erian is trying to move the goal post.

[@djayjp]

As long as rates are above the real rate, then it will function to reduce inflation.

[@colombiabound1633]

What is the real rate? what the government says it is or what regular people see and experience in insurance, gas, food, utilities and everyday items? The “ real rate”

[@lawyer1165]

If the Fed quits the fight against inflation before inflation is defeated, inflation is likely to return. Worse, we could end up with another round of stagflation. Professor, please read some history.

[@kjay5056]

Wall street hurt if they raise rates (gee imagine stocks priced in where they should be), but consumers hurt if they don't. Totally out of touch. Guess his limo driver also does his shopping SMH!!

[@milosnestorovic1594]

Data and Inflation Not a Key, Especially to Cutting Rates, it's Clear..Cutting Rates is Inevitable complete..

[@marthamclaughlin7010]

powell went way overboard on the covid spending , thats created this monster

[@user-se7ul6zt1l]

When’s the last time this guy was right?

[@Holdontight1123]

Remember the bank runs they just had in cali when rates when crazy. I can only imagine if they did that again 😮

[@peterl3669]

Need hike rates and reduce immigrants

[@ZakiSalem-zh5gr]

Maintaining or raising rates is better than cutting them and ending up in stagflation

[@georgejimas3292]

Again with this guy crying about cuts. How stupid do you have to be to want cuts right now?

[@NewTXRealty]

What I do know is if the Fed cuts rates with all this inflation, a loaf of bread will be $10. Homes are already $1 million here in Dallas, so they'll probably go to $1.5 million. On a positive note, electric vehicles may be cheap lolz

[@colombiabound1633]

😂

[@user-ql4zu1ph3f]

I see all kinds of damage if the Fed FAILS to raise interest rates.

[@gordonmichaels600]

Skippy, the money printing will never end so inflation is baked into the cake, you know this. You also know that their foolish thought in solving inflation even in a financialized economy is to raise rates. You know these things, this isn’t new to you. The higher the inflation the higher the interest rates. Look at Turkey, 24% interest rates I believe. This is all standard stuff. Almost forgot, as interest rates rise money moves to bonds and out of the stock market. As a result tax receipts will go down compounding problems for the government. Tag this post skippy and you’ll later read it and see it’s 100% the playbook

[@jamesklaatu9359]

Mo is losing my respect lately. Rates needed to be much higher a lot earlier. More of an aggressive increase would have brought inflation under control in a shorter period of time. Because they pussyfooted around wages got out of control. Now good luck getting this gene back in the bottle. They'd be cutting legitimately by now if they had. Things always break in economic cycles. Get over it and quit bailing out the careless. Much less the worst President since Buchanan.

[@jonnydougs]

We need a .25% rate hike…..used to agree with El-Erian. I think he is too closely aligned with Wall Street and the funny money. His plan is to keep the economy lumbering on…we need a correction.

[@user-vb5in3pu3s]

Crazy he admitted there would be a regional banking crisis

[@skipmatsey8352]

The patient is having withdrawal symptoms from years of artificial stimulus.

[@rickhayes-oh2zm]

they will cut when economy starts wobbling. Even when inflation is higher.

[@gtwentyeightclub887]

True

[@ronlokk]

The FED position..The rich stay rich the poor stay poor. Things are fine.

[@MrAndersonsplaybook]

Pots right make the flip stop bailing out bad bets play your hand!

[@LamarPassmore]

Leviticus 25:37

[@rickhayes-oh2zm]

he is going to use the word collapse

[@user-vb5in3pu3s]

Bloomberg won't bring him on anymore he told the truth though

[@nickvin7447]

He's been wrong 75% of the time, he doesn't deserve to be "on".

[@design_actual]

Bro addicted to free money.

[@zollioneshop]

🧀

[@geraldbrowne]

Pay attention to el-Erian’s worthless words. Track his record. Wrong or backsliding all over.

[@Slide61]

El-Erian seems to follow the wind. Nothing insightful. Just the obvious.

[@rickhayes-oh2zm]

cut rates cut rates cut rates can't wait.

[@High1QWealth]

High interest rates only hurt the lower and middle class!!

[@chicagoeconomist1643]

And inflation doesn’t?

[@High1QWealth]

@@chicagoeconomist1643 Lowering interest rates doesn’t increase inflation it can be reduced by a reduction in federal printing of USD! The entire reason inflation rates have popped so high is because of money printing not low interest rates!

[@mmercato7174]

FED will cut in June!!!