Investors are paying the paying the price for the Federal Reserve's policy mistakes, according to Mohamed El-Erian.
Investors are paying the paying the price for the Federal Reserve's policy mistakes, according to Allianz economic advisor Mohamed El-Erian. "This is a two-part policy mistake of historical proportions," the former CEO of bond giant Pimco told CNBC's " Squawk Box " in a Monday interview. "Part No. 1 was being seduced by 'transitory' and doing nothing," he added, referring to the term Fed officials used to describe inflation through much of 2021.
In addition to raising rates, the Fed is paring up to $95 billion a month in bond holdings from its $8.9 trillion balance sheet. The central bank is unlikely to veer from the present course, El-Erian said. "The trouble is, the alternative is not something that will appeal to them," he said. "So we are going to have to navigate through this historical Fed policy mistake.
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