Despite concerns over the health of the U.S. economy, Allianz Chief Economic Adviser Mohamed El-Erian said it will continue to grow while the rest of the world slows.
Continue Reading Below
“I don’t think we see a major slowdown in the U.S.,” he told FOX Business’ Maria Bartiromo on Monday. “Our economic concerns came from self-inflicting wounds. The Fed miscommunication were the self-inflicting wounds. The shutdown in a way was a self-inflicting wound. Both things are now behind us.”
Ray Dalio, founder of Bridgewater Associates, the world’s largest hedge fund, said a slowdown in China will weigh on the U.S. economy.
“I think that people have to realize it’s going to be a negative all things on growth,” Dalio told FOX Business last week during an interview at the World Economic Forum in Davis. “Europe has a negative on growth and the United States is going to have a negative growth environment—I mean absolute negative—I mean slowing of growth in a material way that could be close to between zero and two percent over the next 18 months.”
However, while El-Erian’s expects the global economy to decelerate, he said, the U.S. economy will continue to grow between 2.5 and 3 percent.
Meanwhile, stock market valuations are improving after plunging to a low on December 24. But El-Erian said to give the markets time before putting new money back to work.
“I wouldn’t rush to put in money now, I would have dry powder,” he said.
Even so, in order to navigate through all the uncertainty, El-Erian said there will be “lots of opportunities” with companies that have a very strong balance sheet, high cash flow generation and good management.”