El-Erian: Divergent Central Bank Policies May Spell Danger | WHAT REALLY HAPPENED

El-Erian: Divergent Central Bank Policies May Spell Danger

Global economies are moving at different speeds, creating a divergence in central bank policy that could cause trouble next year, says Mohamed El-Erian, chief economic adviser at Allianz.

The U.S. economy will strengthen, he writes on Project Syndicate. Chinese growth will stabilize at a level lower than recent averages, and Europe will struggle, El-Erian says.

"This multi-speed economic performance will contribute to multi-track central banking, as pressure for divergent monetary policies intensifies," he writes.

The Federal Reserve will probably start raising interest rates in the third quarter, while the European Central Bank conducts quantitative easing, and the Bank of Japan maintains its "pedal-to-the-metal monetary stimulus," El-Erian says.

The divergence means a stronger dollar, he writes.

Tags:

Comments

SHARE THIS ARTICLE WITH YOUR SOCIAL MEDIA