Mohamed El-Erian raises concerns about stagflation risk and warns of a potential recession in 2024, indicating a significant turning point for the US economy.

Economist Mohamed El-Erian recently highlighted concerns about the U.S. economy due to rising interest rates, a strong dollar, and increasing oil prices. He explained that these circumstances hinder growth and raise the risk of stagflation, a state of low growth and persistent inflation. El-Erian stated that the outlook for the U.S. economy has been adjusted for the sixth time in 15 months, and this change is expected to have a longer-lasting impact, potentially destabilizing the previously robust economy and creating global volatility. He also mentioned that the yield on the U.S. 10-year bond has risen significantly in just two weeks, leading to higher borrowing costs for companies, increased car loan burdens for households, and disruptions in the banking system. El-Erian expressed concerns about the impact of these developments on the financial sector, including disparities in interest rates within banks and the risk of credit market dislocations. He warned that the recent surge in yields, along with other factors affecting economic growth, could make it more difficult for the U.S. to avoid a recession in 2024.