Mohamed El-Erian warned against raising interest rates solely to keep financial markets calm. According to Sina Finance, the Allianz chief economic adviser said monetary policy is not the best tool for addressing the challenges facing today’s economy and financial markets, and that continued tightening by the Federal Reserve and other central banks could create new problems.

El-Erian said institutions often feel bound by an implicit contract with traders to validate market pricing or risk financial market turmoil. He added that this approach creates unnecessary risk by sacrificing the broader economy’s health to preserve market stability. He also said measures aimed at reducing inflation should be led by lawmakers, and warned that if supply and demand problems are not addressed, the U.S. could again fall into the mindset that only the Federal Reserve can solve economic problems.