El-Erian Says Whiplash In December Fed Rate Cut Swings Is Stunning – Cites Four Key Factors, Including ‘Lame Duck Chair’

Mohamed El-Erian, Chief Economic Advisor at Allianz, said on Monday that U.S. markets have experienced a “whiplash” in expectations for the Federal Reserve’s December interest rate decision. 

In a post on X, he described the volatility as atypical for the central bank, which traditionally aims for “predictability and stability,” given the Fed’s role in the global payments system.

El-Erian attributed the erratic market swings to a combination of factors. “It’s the result of shutdown-disrupted data, a dual-mandate squeeze, a lame-duck Chair, and the lack of a clear strategic framework from the world’s most powerful central bank, which has been overly data-dependent for a protracted period,” he wrote.

U.S. equities traded higher during Monday morning. The SPDR S&P 500 ETF (SPY) was up 0.98%, the SPDR Dow Jones Industrial Average ETF (DIA) gained 0.30%, and the Nasdaq-100 tracking Invesco QQQ Trust (QQQ) moved 1.70% higher. Retail sentiment around QQQ on Stocktwits improved to ‘neutral’ from ‘bearish’ territory over the past day, accompanied by ‘high’ levels of chatter.

Get updates to this developing story directly on Stocktwits.

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