El-Erian Says US Strength Already Priced In

The realignment of prices and subsequent end of low volatility does not mean everything will fall apart, but markets do face a tipping point, El-Erian said.

“Either we tip to genuine growth and central banks being able to cope with this change in the global paradigm, or we tip to something worse, and I think the probabilities are pretty equal right now,” he said.

“What I feel strongly about is we’re not going to be able to maintain for one or two more years this low-volatility paradigm where central banks repress major prices,” he added.

Asked about comments from his former Pimco colleague Bill Gross that the good times have passed, he said that is one possible outcome.

The other outcome is investors see a pivot to stronger fundamentals, which would not only validate existing prices but push them higher, he said.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza