El-Erian: Diverging Paths For Fed and ECB Policy Ahead As Europe Slows, U.S. Sticks To Tight Inflation Target

El-Erian expects the Fed to ease monetary policy less than the ECB in coming months due to slowing growth and disinflation in Europe
This could lead the ECB to cut interest rates more often than the Fed, which was unimaginable until recently
The divergence between Fed and ECB policy is impacting relative pricing between Europe and the US in bonds, currencies, etc.
The ECB will likely signal a June rate cut at its policy meeting this week, while the Fed will not cut rates
El-Erian argues the Fed's 2% inflation target is too tight given evolving macro conditions, so some sticky inflation should be tolerated