(Bloomberg). Mohammed El-Erian gives advice to Jerome Powell, Federal Reserve Chairman about tapering.

Since months, the bond market influencer has urged Fed to cut its asset purchases so that inflation does not overtake financial markets. Powell indicated that Powell had said last week that the U.S. central banks could scale back their asset purchases in November and end the process by mid-2022.

“When it comes to an orderly taper, the window is closing,” El-Erian, the chief economic adviser at Allianz (DE:) SE and president of Queens’ College, Cambridge, said Friday on Bloomberg TV’s The Open.

For his arguments in favor of speeding up things, he pointed out the U.S. market for housing.

“We’re still buying $40 billion of mortgages every month,” he said, referring to the Fed’s emergency liquidity injections introduced early in the pandemic. “The problem in the housing market is not that it needs support. It’s that it is pricing out Americans. Americans can no longer afford what’s happening in the housing market.”

U.S. homeownership prospects are shattered by the record-breaking price hikes and stiff competition. The August figure of 29% of sales of existing homes was the lowest since January 2019. It is also lower than the 5 year average of 32%. According to National Association of Realtors this number represents a decline in homeownership prospects. Since the outbreak of the pandemic, the share of young buyers who use government-backed mortgages to purchase homes has dropped.

“We’re still buying $120 billion of assets every single month, what we have been buying since the worst of the Covid crisis,” he added, referring to the Fed’s overall asset-purchase program. “Does it make sense in this environment when demand isn’t a problem, when the bond markets are wide open?”

El-Erian writes also for Bloomberg Opinion. He addressed the subject in his Friday column.

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