NEW YORK, Aug 20 (Reuters) - Mohamed El-Erian, chief economic adviser at Allianz SE, said on Thursday that the U.S. Federal Reserve missed the opportunity to hike rates when both U.S. and international economic data were more in alignment.
“I would have hiked earlier and I would have gotten off zero earlier, but it’s easier to say with hindsight,” El-Erian told cable television network CNBC.
“We know that there was a moment when domestic data was relatively strong and international data was okay. Now, the international data is really scary, and therefore the Fed has lost the opportunity when it had some alignment.”
China, the world’s second-biggest economy, showed weaker-than-expected growth in factory output, investment and retail sales in July. Economic growth in the euro zone slowed in the second quarter as France stagnated and Italy lost momentum, data released Aug. 14 showed.
Fed officials widely agreed last month the economy was nearing the point where interest rates should move higher, but worried that lagging inflation and a weak global economy posed too big a risk to commit to “lift-off,” according to minutes of the Fed’s July policy meeting released on Wednesday.
Traders scaled back bets the Fed would raise rates in September after the minutes. (Reporting by Sam Forgione; Editing by Jennifer Ablan and Dan Grebler)