Credit Risk Will Replace Interest-Rate Risk as 2024’s ‘Big Fear’ Says El-Erian

Economist Mohamed El-Erian foresees credit risk becoming the market’s primary concern in 2024, overtaking interest-rate risk. With the Federal Reserve’s intense rate hiking cycle ending, the focus shifts to economic growth and debt challenges. El-Erian warns of a more difficult global economy ahead, impacted by dwindling savings and high interest rates. He predicts continued volatility in the market, influenced by debt issuance and a softening economy. This shift poses significant threats to market stability and the U.S.’s financial standing, with corporate and government debt issuance playing a crucial role in shaping future yields.