US recession could be caused by this 'big policy mistake': Mohamed El-Erian

By U.S. EconomyFOXBusiness

‘Big policy mistake’ needed for US recession: Mohammed El-Erian

Allianz Chief Economic Advisor Mohammed El-Erian argues the United States would have to make major policy mistake to see a recession.

Although there are some fears of a potential U.S. recession ahead, Allianz chief economic adviser Mohamed El-Erian said Friday the U.S. economy, especially the consumer “is in a good place.”

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“I don’t see a recession unless we get a big policy mistake or we talk ourselves into a recession,” he told FOX Business’ Maria Bartiromo. “If you look at the economic indicators, it’s hard.”


Last month the U.S. consumer prices rose 0.3 percent, according to the Labor Department and the U.S. economy expanded at an annual rate of 2.1 percent in the second quarter of the year, according to the estimate released by the Bureau of Economic Analysis.

However, El-Erian noted that the U.S. would likely inherit some of the global weakness from abroad.

“We are a very strong house in a deteriorating global neighborhood,” he said. “So we may slow to 2 to 2.5 percent growth, but we’re not going into a recession unless we make a big policy mistake.”


So what blunder would cause a downturn?

“If we shut down the government for two to three months… That would dampen consumption investments immediately,” El-Erian explained.

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