Federal Reserve policymakers “don’t have a vision” for where the U.S. economy is going, Allianz Chief Economic Adviser Mohamed El-Erian said Thursday, a day after central bankers decided not to increase interest rates.
“The collateral damage and unintended consequences of this prolonged experiment with very low interest rates [and] very big balance sheets are starting to have a meaningful [negative] effect on the economy,” El-Erian told CNBC’s “Squawk Box.”
Without a clear idea for the future of growth, the Fed has become “overly data-dependent,” El-Erian said, arguing that such an approach has been sending “conflicting signals over time.”
The former co-CEO of Pimco said investors are left wondering whether the Fed is “being totally inconsistent or the Fed [is] being a slave of the markets.”
The Fed raised rates in December for the first time in more than nine years. At the time, central bankers projected four more rate hikes in 2016. But the new year market turmoil scaled back those expectations.