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.