Fed Still ‘Tremendously Relevant,’ Just Less Effective, Says Allianz’s El-Erian

Central banks around the world are becoming less influential “in terms of delivering economic outcomes,” according to Mohamed El-Erian, chief economic advisor at Allianz.

“In the case of the Bank of Japan, they are becoming ineffective, if not counterproductive. But that doesn’t mean that the Fed is not relevant. The Fed is tremendously relevant for markets, for the political system. They are just less effective,” El-Erian said Thursday on CNBC’s “Closing Bell.”

This puts Federal Reserve Chair Janet Yellen is in a tough spot, he said. Yellen is scheduled to speak Friday morning in Jackson Hole, Wyoming, and economists are waiting to dissect her comments looking for hints as to the timing of the next interest rate hike.

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Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam

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