The next is the transcript of an interview with Mohamed El-Erian, chief financial advisor at Allianz, that aired on “Face the Nation with Margaret Brennan” on Aug. 24, 2025.
MARGARET BRENNAN: We flip now to the U.S. financial system. Mohamed El-Erian is the Chief Financial Advisor at Allianz, and he joins us this morning from Greenwich, Connecticut. Good morning to you.
MOHAMED EL-ERIAN: Good morning, Margaret.
MARGARET BRENNAN: So we noticed the Federal Reserve chair sign on Friday that the Fed goes to, as anticipated, start reducing charges very quickly, however he is additionally cited slowing financial progress and a cooling job market. So why then did the monetary markets rally?
MOHAMED EL-ERIAN: As a result of he lastly pivoted to the danger that issues most for the U.S. financial system proper now. By assemble the Fed has to ship two issues, most employment and worth stability, and the Fed is barely increased inflation and a weakening labor market. And what Powell lastly did, and many people really feel he ought to have accomplished this earlier, is he mentioned the danger to the employment aspect is increased than the danger to the inflation aspect, and due to this fact an rate of interest minimize is warranted. As you recognize, many people felt he ought to have minimize final month.
MARGARET BRENNAN: Nicely, the Fed chair mentioned considerably increased tariffs are remaking your entire international commerce system. Tighter immigration coverage has slowed labor progress, and there are large tax and regulation modifications you may’t fairly, you recognize, quantify at this level, however it’s loads of uncertainty. Since economists need to construct off of fashions and knowledge, how do you expect the place we’re going if, mainly, he is saying throw out your fashions?
MOHAMED EL-ERIAN: So one of many issues is he hasn’t regarded ahead sufficient. He is been very knowledge dependent, and due to this fact he has tended to be late. Look, there’s something promising in our future, and that’s productiveness enhancement that comes from thrilling innovation in AI in life sciences and robotics and different areas. We simply need to handle a difficult few months within the interval forward. And if that problem is mishandled, we will be unable to get the alternatives that we’ve that offset loads of structural headwinds, and that features excessive debt and excessive deficits.
MARGARET BRENNAN: I need to ask you about one thing we had been discussing with Congressman Lawe- Lawler simply earlier than you, and that’s this uncommon choice for the U.S. authorities to take a stake in chip maker Intel. That firm has been struggling of late and its CEO was criticized by the president United States. He was criticized by the chair of the Senate Intelligence Committee, Tom Cotton. President Trump talked about all of that on Friday, and he mentioned this.
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PRESIDENT DONALD TRUMP:
He walked in wanting to maintain his job and he ended up giving us $10 billion for america. So we picked up $10 billion. And we do loads of offers like that.
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MARGARET BRENNAN: The president mentioned the CEO needed to maintain his job, so he supplied a ten% stake in his firm. Is that this signaling a brand new period for U.S. coverage? I imply, central planning of the financial system?
MOHAMED EL-ERIAN: I do not suppose so, Margaret. Look, because the congressman mentioned, it is good to ship the message that corporations is not going to get one thing for nothing, and that’s what they’ve gotten used to since 2008, all of the bailouts. And what they’re saying now–
MARGARET BRENNAN: –Which had been paid back–
MOHAMED EL-ERIAN: Which had been paid again, however on the time, the federal government took monumental threat in lots of, many areas. An important distinction, if I’ll, right here, is between possession and management. Sure, the federal government can personal 10% however it should not management how this firm manages its affair, as a result of as soon as we go down that highway that may be a actually harmful highway, and that may eat away at what makes America actually particular, which is a dynamic, entrepreneurial financial system.
MARGARET BRENNAN: And I imagine the Commerce Secretary mentioned there will not be management, however that’s one thing to look at for. I need to additionally ask you about political stress, not simply on the Federal Reserve Chair, which you’ve got nodded to, however the President can be now threatening to fireplace Federal Reserve Governor Lisa Prepare dinner. They’re accusing her with out publicly disclosed proof of mortgage fraud and urging an investigation. Actually, the Justice Division wrote a letter to Chair Powell, encouraging her to be eliminated. Are you involved that that is beginning to be a sample right here of political interference with the Federal Reserve?
MOHAMED EL-ERIAN: So these allegations are unproven, and it is vital to emphasize that. Having simply mentioned that, that is the fifth time within the final 5 years that there was allegations in opposition to a Fed official. And already 4 of them have needed to resign. So what I am involved about is that there appears to have been a tradition that has developed on the Fed that has resulted in these 4 resignations. However I’m very fearful about preserving Fed independence. And an impartial central financial institution is vital to the nicely being of the financial system, and there is plenty of causes for that. So you recognize, one has to disting- distinguish between the 2. I can not communicate to the unproven allegations, however I do suppose it is actually vital to defend the central financial institution independence.
MARGARET BRENNAN: Nicely, as I perceive it, the governor has mentioned she needs to, you recognize, share data, and is denying wrongdoing right here. However simply the actual fact that it’s the President directing the eye in direction of her does not this recommend that even when Jerome Powell steps apart as head of the Federal Reserve, that this is not going to cease this large highlight on the central financial institution that’s so highly effective, and that the worry you’ve got of political interference could not go away?
MOHAMED EL-ERIAN: Sure, and I- my worry and my concern is that the longer Chair Powell is in his place, and it runs out in Could, the longer he is in his place till then, the extra this acts as a magnet for attacking, not solely deeper assaults from the president, however a lot broader from the political system. And that is one factor that fairly a couple of individuals are fearful about.
MARGARET BRENNAN: Mohamed El-Erian, thanks a lot for sharing your perception at present. We’ll go away it there. We’ll be again in a second.
