Pimco's El-Erian: Fed in "difficult" position on bond buys
NEW YORK (Reuters) - The Federal Reserve left its $1.75 trillion bond purchase program unchanged as policymakers in the United States await more signs of economic improvement, Mohamed El-Erian, the chief executive of bond giant Pacific Investment Management Co., said on Wednesday.
"They have kept their options open pending greater clarity on the economic situation and their concerns about the path back to fiscal sustainability," El-Erian, who oversees $756 billion at PIMCO, told Reuters.
The flood of government-bond issuance has kept U.S. Treasuries under pressure and in the process has lifted mortgage rates. That has threatened to kill a refinancing boom that has helped preserve the still-fragile health of recession-weary households and the banks that lend to them.
El-Erian said: "This would put the Fed in an even more difficult position: risk even more weakening of the housing market, with negative implications for employment and growth, or expand quantitative easing and complicate even more the eventual exit process while facing higher risk of political interference."
(Reporting by Jennifer Ablan; Editing by Diane Craft)
