Monetary Tightening & the End of the Risk-on Trade | Mohamed El-Erian

Hidden Forces

Demetri Kofinas

Government, Business

4.8 • 1.6K Ratings

🗓️ 14 February 2022

⏱️ 52 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

In Episode 232 of Hidden Forces, Demetri Kofinas speaks with Mohamed El-Erian, President of Queens' College Cambridge and chief economic adviser at Allianz, the corporate parent of PIMCO where Mohamed was CEO and co-chief investment officer from 2007 to 2014.

El-Erian is one of the most gifted communicators in finance who is intimately connected with the global policymaking community. He has a unique perspective on one of the most important forces driving financial markets and his insights into government policy are invaluable to investors the world over.

In this conversation, Mohamed shares his views on the direction of Fed policy, his projection for rate hikes in early 2022, and what it will take for the Fed to regain control of the inflation narrative. The growing geopolitical instability between the US, Europe, China, and Russia is another subject that El-Erian and Demetri discuss in the context of market psychology, with an eye on its potentially destabilizing effects on global liquidity. The two also discuss crypto, how it has benefited from a narrative of monetary dysfunction, and whether or not it can survive the ire of regulators in 2022 and 2023.

You can access this week’s intelligence report along with the episode transcript to this conversation by going directly to the episode page at HiddenForces.io and clicking on "premium extras." All subscribers gain access to our premium feed, which can be easily added to your favorite podcast application.

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Producer & Host: Demetri Kofinas

Editor & Engineer: Stylianos Nicolaou

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Episode Recorded on 02/01/2022

Transcript

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0:00.0	What's up everybody? My name is Demetra Cofinas and you're listening to Hidden Forces,
0:06.3	a podcast that inspires investors, entrepreneurs and everyday citizens to challenge consensus
0:13.7	narratives and to learn how to think critically about the systems of power shaping our world.
0:19.4	This episode was released early to premium subscribers last week and it features someone who
0:24.8	truly needs no introduction. But for those of you who may not know Muhammad Al-Aryan,
0:30.2	he is the president of Queens College Cambridge and chief economic advisor at Allianz.
0:35.8	The corporate pair of PIMCO, where Muhammad was CEO and co-chief investment officer
0:41.4	from 2007 to 2014. Muhammad is a remarkably gifted communicator who is intimately connected
0:50.3	to the global policy making community. And this makes him uniquely valuable to speak to.
0:56.0	During a time when the prospect of a policy failure is arguably the single biggest risk factor
1:02.4	facing markets and the global economy. I asked Muhammad to appear on the podcast today
1:08.5	because I believe that we are entering a very dangerous period in financial markets. As investors,
1:15.2	we've all been conditioned to believe that markets always go up, that dips are always meant to be
1:20.8	bought and that when things don't work out, central banks are here to bail us out. But in a world
1:27.5	where inflation is persistent and policymakers around the world have begun raising rates and
1:33.0	contracting credit, continuing to bet on mean reversion could prove to be a deadly strategy for
1:40.5	investors. My objective in this conversation is to give you a framework that you can use to
1:47.4	navigate a world that is transitioning from one of insufficient demand to insufficient supply,
1:53.9	from historically low volatility to rising uncertainty and from easy money to hard choices.
2:00.8	This is true not only for central bankers but also for investors like you and me.
2:06.9	Subscribers to our super nerd tier can access the transcript to this episode as well as
2:11.8	the intelligence report, which is the Cliff Notes to the Hidden Forces podcast,
	...

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