PIMCO: Forget Bernanke's Ultra-Low Interest Rate, Next Month The Fed Will Tighten Hard With Other Tools

el erian

PIMCO’s Mohamed El-Erian has issued an important reminder for anyone who thinks Bernanke isn’t tightening monetary policy just because he plans to keep interest rates flat for an extended period.

There are other fed actions, beyond the interest rates, that will tighten policy.

At the end of March, the Fed’s $1.25 trillion mortgage-backed security purchasing program will end.

That’s a huge form of credit tightening, says El-Erian, since it removes massive liquidity from this market.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.