Muhammad Aly El-Eryan, the main economic adviser of Allianz SE.
Bloomberg | Getty pictures
President Donald Trump has a wide range of import tariffs, the US economy is in risk of recession, and the General Economic Adviser of Alliance Mohammad El-Errian warned Friday.
He added that the so-called Trump’s reciprocal tariffs may have a significant impact on the global economy.
“You saw a large degree of recession from a recession from a recession in the United States, increasing up to 3.5% inflation expectations,” he said.
“I do not think that (the recession of the United States) is inevitable, because the structure of the economy is so strong, but the risk was highly high.”
Trump tariffs are spread as the signs of weakness begin to show in the American economy. Last month, the Foundation Managers, strategists and analysts told CNBC that they saw that they saw the horizon slowly with the risk of a decline rising to six months.
El-Errian said that this year is expanding between 1% and 1.5% of the US economy, and when compared to this, “an important change in the growth worldview” Project of an increase of 2.7% of the IMF done at the beginning of this year.
“If we close 1%, we are closing to those known as Stall Speed.” “The economy does not last fast enough to redistribute the resource you need. Therefore, after approaching it, I hope the risk of decline will increase significantly.”
In addition to the warning about the state of the US economy, the tariffs entered the game, El-Eryan also assessed the inflation effect of Trump’s aggressive trade policy in markets.
He also warned that the regime of the tariffs of the markets assess the effects of inflation.
“The first reaction is concerned about the growth. We did not react to the other countries: What will increase in other countries, and what does it go to the weakness of the dollar, and what does it do? asked.
Last week, the latest US data showed that the main inflation has increased more than expected, the Core Private Consumer Cost Index – the main inflation device – noted the largest monthly earnings.
“I think that if we are lucky enough, we will be cut off in no proportions, and we will not surprise me,” said El-Erian.
“If a normal nourishment is fed – and this specialty is very careful about this specialty, because it has not been a normal nutrition – even less likely to be cut.”
Markets are currently prices in four proportions of incision from the year, so CME Group Fedwatch Tracker. At the last meeting of March, the central bank has cut the main ratio of 4.25% to 4.5%, and the United States has cut the United States growth for officials, but still saw two rates by 2025.
‘If the United States is slow down, the rest of the world will slow down’
Immediately after the announcement of Trump’s reciprocal tariffs, European currencies made significant benefits against US dollars, Euro and British pounds To touch six-month heights against Greenback.
El-Erian said that despite the fact that the long-term dollar weakness.
“Sunday, low interest rates, low interest rates, low capital lands down to the United States and therefore have seen the dollar index. The round was the first.” “People will understand that the rest of the world will slow down the United States, so I do not believe that we will continue to see the weakness of the dollar.”
As a result, EL-Erian was divided into economists, for economists, the American and global economy.
“Because you are, there is a difference of interest in the pain (caused by tariffs),” he said, “he said. “You can make a sue, this is the pain for profit later? Yes. Can you do it with confidence? №”
– CNBC’s Jeff Cox and Steve Liesman contributed to this report.
