Monday on CNBC’s “Squawk Box,” Allianz Chief Economic Adviser Mohamed El-Erian warned that sticks have even further to go as markets begin a sell-off triggered by turmoil in the Chinese economy.
El-Erian blamed central bank policies, which have inflated stock prices and said they have further to go until they come back in line with the fundamentals.
“Low enough means a lot lower than here because they’ve been inflated well beyond fundamentals by central bank policies, so in order to bring people back in you’ve got to overshoot the fundamentals on the down side to induce people back in,” El-Erian said.
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