El-Erian Says He Is 'Disappointed' By What Jerome Powell Did Not Cover In His Jackson Hole Speech

Chief economic advisor at Allianz, Mohamed El-Erian, on Monday reportedly expressed his disappointment in Federal Reserve Chair Jerome Powell’s highly anticipated Jackson Hole speech.

In an interview with CNBC, El-Erian said that while he appreciates Powell touching upon risks due to labor market weakness in his speech, he left out what would be the second and third-order effects of the structural changes mentioned during the speech.

“He didn’t give much clarity on what happens after September. And then, he said almost nothing about the policy implications of all the structural changes that he mentioned – in the labor force, in the trading system, in the operation of the domestic economy. 

“I’m glad for what he said, I’m disappointed for what he did not cover,” El-Erian added.

Earlier on Monday, in an opinion piece for the Financial Times, El-Erian called Powell’s approach to the Jackson Hole speech a “missed opportunity,” with the Fed Chair failing to address something he has been criticized for frequently–the need for clearer communication.

“Jackson Hole is the place to do it. This was his last Jackson Hole; he’s had eight of them. We would’ve expected him to talk about lessons learned, we would expect him to keep [his speech] to strategy issues, but he didn’t,” El-Erian said in his CNBC interaction, adding that Powell tends to be dependent on data, not strategy.

Meanwhile, U.S. equities edged lower in Monday’s opening trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was down 0.19%, while the Invesco QQQ Trust (QQQ) declined 0.03%. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘bullish’ territory.

The iShares 7-10 Year Treasury Bond ETF (IEF) was down 0.24% at the time of writing.

Also See: Ed Yardeni Says Fed Should Not Cut Interest Rates In September To Maintain Its Credibility On Inflation: 'A Lot Of People Expected...'

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