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El Erian: Expect a Fed rate hike by September

Posted By Craig Erlam On In Central banks,FX,Newsfeed | Comments Disabled

Mohamed El-Erian, chief economic adviser at Allianz, has told CNBC that investors should prepare for a U.S. rate hike this summer, but added that the Federal Reserve will cushion the blow with “very aggressive forward guidance policy”.

When the Fed eventually does start lifting rates from their current record lows, they will stop “well below” historical averages of 4 percent, the former co-CEO Pimco told CNBC at the Global Financial Markets Forum in Abu Dhabi.

“My own impression is that we will get a rate hike this summer, by September, not in September,” he said.

This will be accompanied by “very aggressive forward policy guidance, which tells us it’s a long journey, so markets don’t go to the terminal late. We want to focus on a very gradual journey,” he said.

CNBC [1]

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Craig Erlam

Craig Erlam [5]

Senior Market Analyst, UK & EMEA at OANDA [6]
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
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