Wall Street Veteran El-Erian Says Fed Comments Roil Markets
- He advises Powell push back on market ‘overreaction’ on rates
- BlackRock’s Rieder says high-grade credit remains best bet
Mohamed El-Erian says markets are giving back an “overreaction” to Federal Reserve Chair Jay Powell’s speech on Wednesday after Friday’s strong jobs report.
Source: BloombergMohamed El-Erian sees the rollercoaster ride in financial markets, with Friday’s surprisingly strong US jobs report producing the latest drop, as another lesson for Chairman Jerome Powell and his Federal Reserve colleagues.
“Once again, Fed communication has contributed to undue volatility in markets,” the Gramercy Funds chairman and Bloomberg Opinion columnist said on Bloomberg Television’s The Open. “While Chair Powell went out of his way to be balanced” in remarks earlier this week, “he did not push back in any way against what already was a significant rally in markets. While he said other things, including warning about inflation, he didn’t realize where the technicals of this marketplace were. He didn’t realize the behavioral aspects. And that’s why you got this overreaction.”