- Who Were the Biggest Winners And Losers This Year?
- GE, Comcast Complete Deal Over NBC Universal: Source
- US May Raise Rates Before Jobs Recover: Fed's Plosser
- Stocks Likely Don't Need Santa to Keep Rally Going
- Larry Kudlow's Open Letter to Tiger Woods
- AIG Slashes US Debt Under Deal With New York Fed
- Seamstress Fined $5.7 Million for Insider Trading
- Super Fantasy Christmas Gifts of 2009
- Commercial Property Fears Are Overblown: Zell, LeFrak
- BofA On Proposed Changes In The Housing Bailout Program
- The Future of The Media Landscape
- November Auto Sales Muddle Along
- Busch: What Obama Won't Say Tonight
- Stick with Equities—Avoid Emerging Markets: Laszlo Birinyi
- Pfizer Chomps On A Carrot
- Predictions 2010: Technology
- Predictions 2010: Consumers
- Predictions 2010: The Big Picture
Text Size 
The Federal Reserve has done its job and now needs to let fiscal policymakers take over, Pimco bond fund co-CEO Mohamed El-Erian told CNBC.
Comparing the U.S. economy to a car, El-Erian said the Fed needs to let somebody else do the driving.
"My sense is the Fed wants to be in the passenger seat now and leave Treasury behind the wheel," he said in a live interview. "I suspect that what they really want to do is not do very much, just leave the option out, keep interest rates low and observe, because the balance is harder now."
Had he been in charge, El-Erian said he would have taken this week's Fed Open Market Committee meeting as an opportunity to outline an exit strategy from the multiple measures it has taken to improve liquidity and keep mortgage rates low. Pimco operates the world's largest bond fund.
But he didn't fault the central bank, saying it has to be careful how it pulls away from such an active role in the financial markets.
"You don't want the Fed to be a direct player in so many markets, because by definition their incentives are noncommercial," El-Erian said. "So it's in the interest of the market to have the Fed gradually—and the critical word is 'gradually'—step back to the sideline and act as a referee, not as a referee and a player."
Print
Email
- Will the Fed raise rates? Will the dollar continue its slide? CNBC experts weigh in on the year ahead.
- Goldman Sachs has forbidden employees from gathering in private holiday parties of 12 or more.
- Do you have what it takes to run your own business? Ask yourself these questions.
- Heavily armed pirates in Somalia have set up a sort of stock exhange to fund their hijackings.
- Since its launch in 1998, Google has become a primary force on the Internet. How much do you know about the company?
- A famed author has written all his work on an old typewriter that is now up for auction. The NYT reports.
Data is a real-time snapshot *Data is delayed at least 15 minutes