El-Erian: Markets Too Obsessed With Interest-Rate Risk

The video discusses the bond market's recent volatility, emphasizing the importance of understanding liquidity, interest rate, and credit risks. It highlights the global economic slowdown and the potential for policy mistakes by the Federal Reserve, which could exacerbate these risks. The discussion stresses the need for careful analysis of market signals and the implications of financial conditions.

What recent market behavior is highlighted as a sign of liquidity issues?

• Stable interest rates

• Decreasing bond prices

• Volatile 10-year yield movements

• Increasing stock prices

What is the current market obsession according to the second section?

• Interest rate risk

• Inflation risk

• Credit risk

• Liquidity risk

What global economic trend is discussed in relation to credit risk?

• Strengthening growth

• Rapid growth

• Weakening growth

• Stable growth

What could potentially turn interest rate risk into credit and liquidity risks?

• Rising equity prices

• Decreasing credit spreads

• Stable financial conditions

• A policy mistake by the Fed

What should be monitored to make informed judgments about market risks?

• Stock market trends

• Real estate values

• Break-even rates and front-end movements

• Commodity prices