Pimco's El-Erian sees rate cuts if injections fail
NEW YORK (Reuters) - Pimco chief executive Mohamed El-Erian said on Tuesday that the Federal Reserve would need to cut interest rates if a series of liquidity injections by global central banks fail to calm volatile markets.
"The emphasis so far is on massive emergency liquidity provision. A rate cut would be needed if this injection fails to liquify broad segments of the markets," El-Erian, whose investment firm manages the world's largest bond fund, told Reuters.
Central banks pumped vast amounts of extra funds into world financial markets for a second day on Tuesday in an increasingly fraught effort to contain the fallout from the crisis sweeping Wall Street's biggest firms.
"They are reacting appropriately to the further drying up in liquidity as market participants hoard cash given heightened systemic uncertainties," El-Erian said.
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