Mohamed El-Erian

The Fed will cut rates in response to the coronavirus, and financial markets will still start to freeze up.

“markets will start freezing up even if the Fed cuts rates, which I think it will”

Said on

27 February 2020 · Interview on CNBC's "Closing Bell"

Source

'Markets will start freezing up even if the Fed cuts rates,' El-Erian says · CNBC

Should come true

by 2020

How sure they sounded

will; I think

Categories

MarketsEconomy

Importance

3 of 5 · Fed response and market functioning at the start of the pandemic shock.

Outcome

Accurate Happened 15 March 2020.

The Fed made an emergency 50 bp cut on March 3, 2020 and cut to near zero on March 15, yet markets still seized up: the March 15 statement cites the need to support "smooth market functioning" for Treasuries and MBS amid severe dysfunction.

Evidence:

• https://www.federalreserve.gov/newsevents/pressreleases/monetary20200303a.htm
• https://www.federalreserve.gov/newsevents/pressreleases/monetary20200315a.htm