El-Erian on the economy and coronavirus: It will be depend on whether people modify behavior

Yahoo Finance, Released on 7/30/20

“It is the square-root recovery in the sense that we came down very sharply, we saw that in today’s 32.9% annualized contraction in GDP that you mentioned,” El-Erian said. “We came back strongly initially — we saw that in last month’s jobs report and the initial improvement in jobless claims, and now we’re getting the leveling off.”

“And that is of worry because not only do we have to deal with the damage that has been created to the economy, but also unfortunately we now become much more sensitive to any policy slippage,” El-Erian said. And I say that because …we also have continued disagreement on Capitol Hill as to what to do next with the relief package.”

Mohamed El-Erian is the Chief Economic Adviser of Allianz, a multinational financial services company. He is the former CEO and co-Chief Investment Officer of PIMCO, a global investment firm and one of the world’s largest bond funds in the world. Dr. El-Erian also served as a member of the faculty of Harvard Business School. Before joining PIMCO, Dr. El-Erian was a managing director at Salomon Smith Barney/Citigroup in London and before that, he spent 15 years at the International Monetary Fund in Washington, D.C. His latest book is The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse.

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