The risk of a recession “is getting higher and higher,” says Mohamed El-Erian

“My definition of a recession is a holistic definition. It goes well beyond two quarters of negative GDP,” said the chief economic advisor of Allianz

The labor market is too strong. Consumer spending is too strong. Business balance sheets are too strong. We simply are not in a recession

El-Erian said in order to stop the U.S. from slipping into a recession there are four measures in particular tht need to be taken.

“First and foremost, we've got to get control of the inflation beast,” said El-Erian.

El-Erian also said the government needs “to target fiscal policy more to protect the most vulnerable segments of our society. That has massive economic, social, and political consequences.”

He also suggested “pro-growth, pro-productivity reforms that need to be done, including to increase labor force participation,” in order to improve supply chains.

"So the non-banking sector is still offside. And we have to keep an eye on the financial stability risk because that could come back and harm the economy,” he added