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Mohammed El Erian: life after Pimco

Mohammed El Erian: life after Pimco

Ex-Pimco chief Mohammed El-Erian has said he has no immediate plans to go back into the world of investment and may even opt to find a new career following his shock exit from bond giant Pimco.

In an interview with Bloomberg, El Erian declined to comment about his 'private interactions' with Bill Gross and Pimco since he departed the firm unexpectedly in January of this year. Reports have speculated that growing tensions between El Erian and co-chief investment officer Bill Gross were behind his exit.

El Erian simply replied: 'I worked there for 14 years and had a great time and friendships grew over time.I am expecting the firm to go from success to success.'

He said he has tried to ignore most of the press coverage that has surrounded his departure from Pimco, adding that part of the reason he chose to leave the world's largest bond house was down to missing out on important moments in his daughter's life.

'When your daughter comes to you with a list of 22 things that you have missed as a parent, you are missing too many of these special moments,' he explained. He said that this served as a wake up call that he needed to step back from his full-time day job at Pimco.

He said that having already had two careers - one as a deputy director at the International Monetary Fund and the second in asset management at Pimco - he is open to the idea of a new or different third career.

'I don’t know when I am going to land, I am just enjoying the journey,' he said.

In the meantime, with numerous part-time roles, which include working as a chief economic adviser for Allianz, Pimco's parent and a commentator, he anticipates a return to the industry is unlikely until at least the end of this year.

The former chief is also now working on a new book, which he said looks at 'the rise and possible fall of central banks'.

US economic outlook

Looking at the current economic backdrop, he pointed to the transition from a 'new normal' to 'secular stagnation'. He anticipates the US economy will struggle to move forwards unless a range of issues are addressed that are undermining growth and job creation. A lack of global demand, the issue of how responsive the economy is and debt overhangs are three factors that are weighing on US economic growth.

'It is difficult to find a new explanation that captures all three in an elegant way,' he added.

He highlights comments made by incoming Federal Reserve chair Janet Yellen and outgoing chair Ben Bernanke, which suggest that an uncertain outlook will remain as the Fed evolves from a tools-based world to one that is objectives-based. This means the uncertainty premium goes up, El Erian added.

Due to slower growth in China and unresolved issues in the Eurozone, he does not expect the Fed to raise rates any time soon.

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