Mohamed A. El-Erian wearing a suit and tie: Reuters/Lucy Nicholson


© Reuters/Lucy Nicholson
Reuters/Lucy Nicholson

  • Economist Mohamed El-Erian says markets may falter as the Fed’s liquidity “engine” becomes less and less powerful, and as investors begin to challenge elevated valuations. 
  • “If that engine disappears, we have a long way between where asset prices are right now and where fundamentals will validate them,” he told Bloomberg TV. 
  • In a separate op-ed for Bloomberg, El-Erian said economic and corporate fundamentals must improve for valuations to be sustained.
  • Visit Business Insider’s homepage for more stories.

Renowned economist Mohamed El-Erian says the stock market faces downside risk as the Fed’s liquidity “engine” becomes less and less powerful. He also sees the possibility of a dip if more investors start to question whether sky-high valuations can be validated by fundamentals.

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“Where we go from here is going to continue to be liquidity driven, if that engine disappears, we have a long way between

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