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

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
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.
Craig Erlam