Iran war could lead to U.S. inflation shock, says Allianz's Mohamed El-Erian

• El-Erian is 'more worried than the average' due to the asymmetrical war dynamics and its economic implications.
• Predicts a sequence of shocks: energy price shock, interest rate shock, broader inflation shock, demand shock, and potential financial instability.
• Warns of demand destruction and physical shortages, particularly in Asia, which will impact the U.S. economy.
• Believes markets are not pricing in the full extent of disruption or the limited policy flexibility of central banks.

Mohamed El-Erian expresses significant concern over the global economic outlook, predicting a sequence of shocks starting with energy prices, leading to broader inflation, demand destruction, and potential financial instability. He highlights that markets are not fully pricing in the long-term damage from the war, physical shortages, or the limited policy flexibility available to central banks.