PIMCO's CEO Mohamed El-Erian was on Bloomberg to discuss monthly jobs report for August and what that means for the U.S. economy and the Fed's further easing action going forward.
-- Jobs numbers for the month of August were not good and that makes the case for QE3 coming sooner than later - in September or December.
-- Why? Including August jobs numbers average numbers of jobs created in the last three months have fallen below 100,000. That is a very low number. There is no growth in hourly earnings, labor participation has gone down further and finally teenage unemployment has went up close to 25%. Combine all these together and it points to a need for strong policy response from Washington and the Fed.
-- What you will get is a response from the Fed only, as Congress is so polarized.
-- Treasuries or Germany bunds, both flight to safety, which has a better outlook - Treasuries as Fed is going to buy them, what ECB is doing buying peripheral bonds and not bunds.
-- ECB's bond-buying program has reduced the risk of euro zone breakup in the short term.
Credit and Source: Bloomberg, www.bloomberg.com
Here is the video:
http://bloom.bg/P82wA6
-- Jobs numbers for the month of August were not good and that makes the case for QE3 coming sooner than later - in September or December.
-- Why? Including August jobs numbers average numbers of jobs created in the last three months have fallen below 100,000. That is a very low number. There is no growth in hourly earnings, labor participation has gone down further and finally teenage unemployment has went up close to 25%. Combine all these together and it points to a need for strong policy response from Washington and the Fed.
-- What you will get is a response from the Fed only, as Congress is so polarized.
-- Treasuries or Germany bunds, both flight to safety, which has a better outlook - Treasuries as Fed is going to buy them, what ECB is doing buying peripheral bonds and not bunds.
-- ECB's bond-buying program has reduced the risk of euro zone breakup in the short term.
Credit and Source: Bloomberg, www.bloomberg.com
Here is the video:
http://bloom.bg/P82wA6
