Pimco CEO: Bernanke Signaling ‘More Activism’

Despite Federal Reserve Chairman Ben Bernanke’s announcement that there would be no immediate action, the central bank could be setting up for further easing in the future, PIMCO CEO and co-CIO Mohamed El-Erian told CNBC on Friday.

“First, Bernanke provided a very robust defense of what he’s done so far. Secondly, he told usp Problems were cyclical, not structural. And finally, he told us that costs are containable, they’re manageable. So, in my opinion, he is laying the ground for more activism from the Fed,” he said on “Fast Money.”

El-Erian also pointed to three things to watch in what Bernanke does.

“Be very careful between his willingness, his ability and his effectiveness: Willingness, huge. Ability, more limited because his tools are imperfect. And effectiveness, even more limited,” he said.

“If you want to bet on the Fed, you’re looking at the short end of the Treasury curve. You’re looking at related high-quality corporates. You’re looking at mortgages and related sales of volatility. You also should recognize that the market will protect itself from the inflation threat, so hard assets — especially gold — will benefit. If you want to go all the way to risk assets — equities and high-yield — remember that you are dependent on China and Europe when you go all the way out there.”

Trader disclosure: On Aug. 31, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Jon Najarian is long AAPL CALL SPREADS; Jon Najarian is long JPM CALLS SPREADS; Jon Najarian is long SBUX CALL SPREADS; Jon Najarian is long FB CALL SPREADS; Jon Najarian is long GOOG CALL SPREADS; Jon Najarian is long KO CALL SPREADS; Jon Najarian is long MCD CALL SPREADS; Jon Najarian is long UPL CALL SPREADS; Jon Najarian is long CME; Jon Najarian is long CBOE; Jon Najarian is long GLUU; Jon Najarian is long STSI; Pete Najarian is long AAPL; Pete Najarian is long C; Pete Najarian is long JPM CALLS; Pete Najarian is long INTC; Pete Najarian is long SBUX; Pete Najarian is long FB; Pete Najarian is long MSFT; Pete Najarian is long INTC; Pete Najarian is long HPQ; Pete Najarian is long BAC CALLS; Pete Najarian is long MRK; Mike Murphy is long WFC; Mike Murphy is long TGT; Mike Murphy is long HOV; Mike Murphy is long TWI; Steve Grasso is long AET; Steve Grasso is long ASTM; Steve Grasso is long BA; Steve Grasso is long F; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long S; Dennis Gartman is long Gold; Dennis Gartman is long Grains; Dennis Gartman is short YEN; Dennis Gartman is short EUR.

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