Three Signals We've Entered a New Economic Era
About this episode
Mohamed El-Erian argues the world economy has entered a new era defined by three shifts. First, the supply side has become less flexible: pandemic-era shocks to labor force participation, supply chains, and globalization mean inflation will be more persistent than the post-2008 decades. Second, the age of limitless central-bank liquidity is ending; years of quantitative easing created markets conditioned on the 'Fed put,' misallocated capital, and left policymakers with few good options. Third, risk has migrated from regulated banks to shadowy corners of finance, making financial accidents — like the UK pension crisis and the crypto collapses — more likely. He recounts how PIMCO survived Lehman Brothers through scenario planning, criticizes the Fed for treating inflation as transitory too long, and warns recession odds are uncomfortably high. The conversation also ranges over China, the crypto shakeout, and the books that shaped his thinking.