Transcript: Economist Mohamed El-Erian on “Face the Nation with Margaret Brennan,” Aug. 24, 2025

The following is the transcript of an interview with Mohamed El-Erian, chief economic advisor at Allianz, that aired on “Face the Nation with Margaret Brennan” on Aug. 24, 2025.

MARGARET BRENNAN: We turn now to the U.S. economy. Mohamed El-Erian is the Chief Economic Advisor at Allianz, and he joins us this morning from Greenwich, Connecticut. Good morning to you.

MOHAMED EL-ERIAN: Good morning, Margaret. 

MARGARET BRENNAN: So we saw the Federal Reserve chair signal on Friday that the Fed is going to, as expected, begin lowering rates very soon, but he’s also cited slowing economic growth and a cooling job market. So why then did the financial markets rally?

MOHAMED EL-ERIAN: Because he finally pivoted to the risk that matters most for the U.S. economy right now. By construct the Fed has to deliver two things, maximum employment and price stability, and the Fed is looking at slightly higher inflation and a weakening labor market. And what Powell finally did, and many of us feel he should have done this earlier, is he said the risk to the employment side is higher than the risk to the inflation side, and therefore an interest rate cut is warranted. As you know, many of us felt he should have cut last month.

MARGARET BRENNAN: Well, the Fed chair said significantly higher tariffs are remaking the entire global trade system. Tighter immigration policy has slowed labor growth, and there are big tax and regulation changes you can’t quite, you know, quantify at this point, but it’s a lot of uncertainty. Since economists have to build off of models and data, how do you predict where we’re going if, basically, he’s saying throw out your models? 

MOHAMED EL-ERIAN: So one of the problems is he hasn’t looked forward enough. He’s been very data dependent, and therefore he has tended to be late. Look, there is something promising in our future, and that is productivity enhancement that comes from exciting innovation in AI in life sciences and robotics and other areas. We just have to manage a challenging few months in the period ahead. And if that challenge is mishandled, we will not be able to get the opportunities that we have that offset a lot of structural headwinds, and that includes high debt and high deficits. 

MARGARET BRENNAN: I want to ask you about something we were discussing with Congressman Lawe- Lawler just before you, and that is this unusual decision for the U.S. government to take a stake in chip maker Intel. That company has been struggling of late and its CEO was criticized by the president United States. He was criticized by the chair of the Senate Intelligence Committee, Tom Cotton. President Trump mentioned all of that on Friday, and he said this.

[SOUND ON TAPE STARTS] 

PRESIDENT DONALD TRUMP:  

He walked in wanting to keep his job and he ended up giving us $10 billion for the United States. So we picked up $10 billion. And we do a lot of deals like that.

[SOUND ON TAPE ENDS] 

MARGARET BRENNAN: The president said the CEO wanted to keep his job, so he offered a 10% stake in his company. Is this signaling a new era for U.S. policy? I mean, central planning of the economy?

MOHAMED EL-ERIAN: I don’t think so, Margaret. Look, as the congressman said, it’s good to send the message that companies will not get something for nothing, and that is what they’ve gotten used to since 2008, all the bailouts. And what they are saying now–

MARGARET BRENNAN: –Which were paid back–  

MOHAMED EL-ERIAN: Which were paid back, but at the time, the government took enormous risk in many, many areas. The most important distinction, if I may, here, is between ownership and control. Yes, the government can own 10% but it must not control how this company manages its affair, because once we go down that road that is a really dangerous road, and that would eat away at what makes America really special, which is a dynamic, entrepreneurial economy. 

MARGARET BRENNAN: And I believe the Commerce Secretary said there won’t be control, but that is something to watch for. I want to also ask you about political pressure, not just on the Federal Reserve Chair, which you’ve nodded to, but the President is also now threatening to fire Federal Reserve Governor Lisa Cook. They’re accusing her without publicly disclosed evidence of mortgage fraud and urging an investigation. In fact, the Justice Department wrote a letter to Chair Powell, encouraging her to be removed. Are you concerned that this is starting to be a pattern here of political interference with the Federal Reserve?

MOHAMED EL-ERIAN: So these allegations are unproven, and it’s important to stress that. Having just said that, this is the fifth time in the last five years that there has been allegations against a Fed official. And already four of them have had to resign. So what I’m concerned about is that there seems to have been a culture that has developed at the Fed that has resulted in these four resignations. But I am very worried about preserving Fed independence. And an independent central bank is critical to the well being of the economy, and there’s lots of reasons for that. So you know, one has to disting- distinguish between the two. I can’t speak to the unproven allegations, but I do think it’s really important to defend the central bank independence. 

MARGARET BRENNAN: Well, as I understand it, the governor has said she wants to, you know, share information, and is denying wrongdoing here. But just the fact that it is the President directing the attention towards her doesn’t this suggest that even if Jerome Powell steps aside as head of the Federal Reserve, that this isn’t going to stop this big spotlight on the central bank that is so powerful, and that the fear you have of political interference may not go away?

MOHAMED EL-ERIAN: Yes, and I- my fear and my concern is that the longer Chair Powell is in his position, and it runs out in May, the longer he’s in his position until then, the more this acts as a magnet for attacking, not only deeper attacks from the president, but much broader from the political system. And that’s one thing that quite a few people are worried about. 

MARGARET BRENNAN: Mohamed El-Erian, thank you so much for sharing your insight today. We’ll leave it there. We’ll be back in a moment.