Transcription: Economist Mohamed el-Erian in

The next is the transcription of an interview with Mohamed El-Eian, Chief Economic Advisor of Allianz, which was issued in “Fac The Nation with Margaret Brennan” on August 24, 2025.

Margaret Brennan: We now go to the US economy. Mohamed El-Erian is Allianz’s main economic advisor, and joins us this morning from Greenwich, Connecticut. Good morning to you.

Mohamed el-eian: Good morning, Margaret.

Margaret Brennan: Then we saw the signal of the president of the Federal Reserve on Friday that the Fed, as expected, will begin to reduce rates very soon, but also cited slowing down economic growth and a cooling labor market. So why were financial markets joined then?

Mohamed El-erian: Because he finally turned to the risk that matters most for the American economy at this time. When building, the Fed has to deliver two things, the maximum employment and the stability of the prices, and the Fed is looking for slightly higher inflation and a weakening labor market. And what Powell finally did, and many of us feel that he should have done this before, that is to say that the risk to the work side is greater than the risk for the side of inflation and, therefore, a cut of interest rates is justified. As you know, many of us feel that it should have cut last month.

Margaret Brennan: Well, the president of the FED said that significantly higher tariffs are remakeing the entire world commercial system. The strictest immigration policy has slowed work growth, and there are large tax and regulation changes that you cannot, you know, quantify at this time, but it is a lot of uncertainty. Since economists have to build from models and data, how do they predict where we are going, basically, he says he throws his models?

Mohamed el-erian: Then, one of the problems is that he has not expected enough. He has depended a lot on the data and, therefore, has tended to be late. Look, there is something promising in our future, and it is an improvement in productivity that comes from an exciting innovation in AI in the sciences of life and robotics and other areas. We just have to manage a few months challenging in the period ahead. And if that challenge is poorly managed, we will not be able to obtain the opportunities that we have to compensate for many winds against structural ones, and that includes a high debt and high deficits.

Margaret Brennan: I want to ask you something we were discussing with Congressman Lawe-Lawler right in front of you, and that is this unusual decision for the United States government to take a participation in the Intel chips manufacturer. That company has been fighting lately and its CEO was criticized by the president of the United States. It was criticized by the president of the Senate Intelligence Committee, Tom Cotton. President Trump mentioned all that on Friday, and he said this.

[SOUND ON TAPE STARTS]

President Donald Trump:

He entered wanting to maintain his job and ended up giving us $ 10 billion for the United States. So we collected $ 10 billion. And we make many offers like that.

[SOUND ON TAPE ENDS]

Margaret Brennan: The president said that the CEO wanted to maintain his job, so he offered a 10% participation in his company. Is this pointing to a new era for the policy of the United States? I mean, central planning of the economy?

Mohamed el-eian: I don’t think so, Margaret. Look, as the congressman said, it is good to send the message that companies will not receive something for anything, and that is what has become accustomed since 2008, all bailouts. And what they say now

Margaret Brennan: -What were returned

Mohamed el-erian: They were returned, but at that time, the government took a huge risk in many, many areas. The most important distinction, if I can, here, is between property and control. Yes, the Government can have 10%, but it should not control how this company manages its adventure, because once we are going that path that is a really dangerous path, and that will eat what makes the United States really special, which is a dynamic and business economy.

Margaret Brennan: And I think the Secretary of Commerce said there will be no control, but that is something to take into account. I also want to ask about the political pressure, not only in the president of the Federal Reserve, which he has nodded, but the president now also threatens to fire the governor of the Lisa Cook Federal Reserve. They accuse it without publicly revealing evidence of mortgage fraud and urge an investigation. In fact, the Department of Justice wrote a letter to President Powell, encouraging her to be eliminated. Do you worry that this is beginning to be a political interference pattern with the Federal Reserve?

Mohamed el-erian: Therefore, these accusations are not proven, and it is important to emphasize that. Having said that, this is the fifth time in the last five years that there have been accusations against a Fed official. And four of them have had to resign. So, what worries me is that there seems to have been a culture that has been developed in the Fed that has resulted in these four resignations. But I am very worried about preserving the independence of the Fed. And an independent central bank is essential for the well -being of the economy, and there are many reasons for that. So, you know, one has to distinguish between the two. I cannot speak with the unseeding accusations, but I think it is really important to defend the independence of the Central Bank.

Margaret Brennan: Well, as I understand, the governor has said that he wants, you know, share information, and he is denying irregularities here. But only the fact that he is the president who directs attention to her, does not suggest that even if Jerome Powell departs as head of the Federal Reserve, that this will not stop this great care center in the Central Bank that is so powerful and that the fear of political interference may not disappear?

Mohamed el-erian: Yes, and my fear and my concern is that the longer the president Powell is in his position, and he exhausts in May, the longer he is in his position until then, the more he acts as a magnet to attack, not only deeper attacks of the president, but much broader from the political system. And that is something that many people care about.

Margaret Brennan: Mohamed el-erian, thank you very much for sharing your vision today. We will leave it there. We will return in a moment.