Markets should brace for a severe recession that might forever change the world economy, Mohamed El-Erian has warned.
The economist said on Tuesday that a combination of pressures on supply, central bank tightening, and market "fragility" were all likely to weigh on growth.
"Three new trends in particular hint at such a transformation and are likely to play an important role in shaping economic outcomes over the next few years: the shift from insufficient demand to insufficient supply as a major multi-year drag on growth, the end of boundless liquidity from central banks, and the increasing fragility of financial markets," El-Erian wrote in a Foreign Affairs op-ed.
Meanwhile, central banks such as the US Federal Reserve have started to aggressively raise interest rates, which could be starting to tame inflation but will also hit economic growth.