El-Erian Says Wage Growth Is Key to Fed's March Decision

The video discusses the factors influencing the probability of a rate hike by the Federal Reserve, focusing on employment numbers, wage growth, and inflation dynamics. It highlights the market's underpricing of a potential rate hike and the importance of understanding inflation and wage dynamics. The discussion also covers technical flows in the market and other factors like stability in Germany and fiscal policy changes.

What is needed to increase the implied probability above 70%?

• Strong employment creation and wage growth

• Strong employment creation only

• Inflation control

• Wage growth only

Why did the speaker believe the market was underpricing the risk of a March rate hike?

• Due to high employment rates

• Because of low inflation rates

• Due to political instability

• Based on the numbers and market trends

What is the main concern for the Federal Reserve according to the speaker?

• Employment rates

• Wage dynamics

• Stock market performance

• Political changes

What factor was mentioned as putting downward pressure on rates?

• Stability in Germany's bond market

• Clarification from the Dallas Fed president

• Increased defense spending

• Euro dollar selling

What fiscal policy aspect was highlighted as easier to implement?

• Raising taxes

• Cutting social programs

• Increasing defense spending

• Reducing defense spending