Mohamed A. El-Erian Re-poster
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Mohamed A. El-Erian Re-poster
Rene M Kern Prof of Prac at Wharton. Allianz Advisor. Gramercy Chair. Chair of UnderArmour Board. Former Pimco CEO/co-CIO and President of Queens' Col Cambridge
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Good morning.
Increasing oil prices are currently driving a worldwide shift in government bond yields once again. The United Kingdom provides one of the most striking examples of this global trend. I have frequently referred to the UK as a high beta advanced economy, and recent market activity certainly aligns with that description. As shown in the Bloomberg data below, the yield on the 10-year bond has climbed to a mark unobserved in nearly 20 years. Meanwhile, the 30-year yield has soared to a point not reached in almost 30 years.
#economy #markets #bonds #yields #oil
Increasing oil prices are currently driving a worldwide shift in government bond yields once again. The United Kingdom provides one of the most striking examples of this global trend. I have frequently referred to the UK as a high beta advanced economy, and recent market activity certainly aligns with that description. As shown in the Bloomberg data below, the yield on the 10-year bond has climbed to a mark unobserved in nearly 20 years. Meanwhile, the 30-year yield has soared to a point not reached in almost 30 years.
#economy #markets #bonds #yields #oil
A recent report by Bloomberg supports the observation that GCC countries are increasingly channeling their newly generated capital toward local objectives. As a result of this shift, global markets are facing a squeeze in the availability of funds precisely when the overall need for capital is growing. If you are interested in exploring the context behind these developments, an informative column published by the FT in March offers excellent insights:
https://www.ft.com/content/bdc2ad8c-d22f-44b5-aec4-14740f810a66?syn-25a6b1a6=1
#economy #markets @FT
https://www.ft.com/content/bdc2ad8c-d22f-44b5-aec4-14740f810a66?syn-25a6b1a6=1
#economy #markets @FT
Earlier today, the upward climb of longer-term US Treasury yields kept its momentum. This ongoing increase has now completely wiped out the original market response that followed the US Treasury intervention announcement. Please refer to the Bloomberg data provided below for a closer look.
#economy #markets #bonds #yields
#economy #markets #bonds #yields
Andrew Bailey, Chair of the FSB (Financial Stability Board), recently shared an important letter with the G-20. You can access the complete document using the link provided below. In his message, he cautions that global markets remain vulnerable to a potentially disorderly correction that could spread across borders. He highlights that this risk is especially prominent right now due to fragilities in sovereign debt markets, vulnerabilities in private credit, and stretched asset valuations.
This situation serves as a great reminder of the natural equation between promise and peril when it comes to innovation. The very forces that make incredible progress possible, which we absolutely need to unleash, also carry inherent downside risks. Our shared responsibility is to carefully identify and mitigate those dangers while continuing to embrace the upside.
https://www.fsb.org/2026/08/fsb-chairs-letter-to-g20-finance-ministers-and-central-bank-governors-august-2026/
#economy #markets #ai #innovation
This situation serves as a great reminder of the natural equation between promise and peril when it comes to innovation. The very forces that make incredible progress possible, which we absolutely need to unleash, also carry inherent downside risks. Our shared responsibility is to carefully identify and mitigate those dangers while continuing to embrace the upside.
https://www.fsb.org/2026/08/fsb-chairs-letter-to-g20-finance-ministers-and-central-bank-governors-august-2026/
#economy #markets #ai #innovation
Based on the CNBC table below, oil prices started the week by jumping more than 2% during Asia-Pacific trading. This increase comes on the heels of news reports regarding US military strikes in Iran. Meanwhile, fuel costs are offering no relief to drivers. As indicated by the AAA data below, US regular gasoline is stubbornly remaining above $4 a gallon, and diesel is lingering right around its all-time high.
#oil #energy #economy #markets @CNBC @AAA_Travel
#oil #energy #economy #markets @CNBC @AAA_Travel
Financial markets are actively navigating an ongoing struggle between corporate earnings and macro policy. This environment is being shaped by significant global developments, which range from the latest US policy announcements to a record-breaking $96bn monthly FX intervention executed by Japan. I invite you to read my weekly review and a look ahead by visiting either of the links provided here.
https://mohamedelerian.substack.com/p/the-weekly-look-at-the-global-economy-288?r=33wip&utm_campaign=post&utm_medium=web&showWelcomeOnShare=true
https://www.linkedin.com/pulse/week-ahead-global-economy-markets-mohamed-el-erian-rhkxc/
#economy #markets
https://mohamedelerian.substack.com/p/the-weekly-look-at-the-global-economy-288?r=33wip&utm_campaign=post&utm_medium=web&showWelcomeOnShare=true
https://www.linkedin.com/pulse/week-ahead-global-economy-markets-mohamed-el-erian-rhkxc/
#economy #markets
An article I contributed to the Financial Times went live earlier today. The piece outlines my personal perspective and analysis concerning the inaugural Jackson Hole address delivered by Federal Reserve Chair Kevin Warsh. You can check out my complete thoughts on the implications of his remarks at the link below.
https://ft.com/content/4319c6b7-5a25-41a7-836f-ca068ac4fe60
#economy #markets #FederalReserve #ArtificialIntelligence #inflation @ft
https://ft.com/content/4319c6b7-5a25-41a7-836f-ca068ac4fe60
#economy #markets #FederalReserve #ArtificialIntelligence #inflation @ft
My latest piece has just been published by the Financial Times. Within the article, I provide my analysis and thoughts regarding the first speech delivered at Jackson Hole by Federal Reserve Chair Kevin Warsh. You can explore my full perspective through the link provided below.
https://www.ft.com/content/4319c6b7-5a25-41a7-836f-ca068ac4fe60
#economy #markets #federalreserve #ai #inflation @ft
https://www.ft.com/content/4319c6b7-5a25-41a7-836f-ca068ac4fe60
#economy #markets #federalreserve #ai #inflation @ft
Wishing you a wonderful morning. A recent article from the Wall Street Journal explores the underlying methods and broader consequences of the strategy China has been pursuing over several years. The text analyzes how the country directs its oil imports, maintains strategic stockpiles, and develops energy substitution. Through these coordinated efforts, the nation has firmly established its position as the most powerful swing buyer in global energy markets. You can read the full analysis at the following link.
https://www.wsj.com/world/china/china-oil-market-edf57588
#economy #china #markets #oil #energy
https://www.wsj.com/world/china/china-oil-market-edf57588
#economy #china #markets #oil #energy
I would like to express my appreciation to Contessa Brewer. Please feel free to watch a video segment of our discussion from this afternoon on Closing Bell via the link below.
https://www.cnbc.com/video/2026/08/28/what-we-got-today-is-a-clear-message-the-economy-is-doing-well-says-allianz-el-erian.html
#economy #markets @CNBC
https://www.cnbc.com/video/2026/08/28/what-we-got-today-is-a-clear-message-the-economy-is-doing-well-says-allianz-el-erian.html
#economy #markets @CNBC
Right now, the market-implied probability for a Fed rate increase in September has climbed to almost 60%, with Kalshi currently pricing the likelihood at 49%. These numbers both appear overly elevated based on three key factors.
First of all, inflation expectations derived from market metrics continue to be firmly stabilized. Secondly, productivity enhancements powered by AI offer good justification for optimism regarding the future development of the supply side, while any apprehensions related to AI demand are expected to diminish. Ultimately, implementing further Fed rate hikes would negatively impact areas of the economy that are highly sensitive to interest rates and are already enduring challenges, specifically the housing sector.
#economy #markets #federalreserve #inflation
First of all, inflation expectations derived from market metrics continue to be firmly stabilized. Secondly, productivity enhancements powered by AI offer good justification for optimism regarding the future development of the supply side, while any apprehensions related to AI demand are expected to diminish. Ultimately, implementing further Fed rate hikes would negatively impact areas of the economy that are highly sensitive to interest rates and are already enduring challenges, specifically the housing sector.
#economy #markets #federalreserve #inflation
There are a couple of important developments to share regarding the Japanese currency today.
First, the yen has once again depreciated to a level of 160 against the US dollar. As illustrated by the CNBC chart below, this decline is certain to drive renewed rumors about potential market intervention.
Furthermore, the situation has drawn commentary from the highest levels of government. In recent correspondence sent to Senator Elizabeth Warren, US Treasury Secretary Scott Bessent pointed out that Japan remains a massive holder of U.S. Treasuries. He cautioned that chaotic conditions in the yen markets have the potential to cause forced unwinds. Such a scenario, he explained, could upset global market stability and ultimately result in increased borrowing costs for everyday American families and businesses.
#economy #japan #markets #yen #fx
First, the yen has once again depreciated to a level of 160 against the US dollar. As illustrated by the CNBC chart below, this decline is certain to drive renewed rumors about potential market intervention.
Furthermore, the situation has drawn commentary from the highest levels of government. In recent correspondence sent to Senator Elizabeth Warren, US Treasury Secretary Scott Bessent pointed out that Japan remains a massive holder of U.S. Treasuries. He cautioned that chaotic conditions in the yen markets have the potential to cause forced unwinds. Such a scenario, he explained, could upset global market stability and ultimately result in increased borrowing costs for everyday American families and businesses.
#economy #japan #markets #yen #fx
I am currently reviewing the speech delivered by Chair Warsh at Jackson Hole. For anyone interested in reading the address, you can find the complete text at the following URL.
https://www.federalreserve.gov/newsevents/speech/warsh20260828a.htm
#economy #markets #federalreserve
https://www.federalreserve.gov/newsevents/speech/warsh20260828a.htm
#economy #markets #federalreserve
The annual Jackson Hole event has officially arrived. As Kevin Warsh gets ready to present his very first keynote speech as Federal Reserve Chair, he is confronted with a challenging balancing act. He must figure out how to address a remarkably diverse and elevated set of expectations from the public and the financial world.
Observers generally fall into two distinct camps. The first group wants him to honor the habits of his predecessors by providing explicit forward guidance and explaining his immediate reaction function. Conversely, the second group is hoping for a return to the foundational, secular spirit that originally defined this exclusive conference. Taking this historical route would mean tackling an expanding and intricate array of domestic and policy matters, especially as we navigate massive structural changes fueled by geo-economics and technological innovation.
Finding the perfect middle ground between these two perspectives will be incredibly tough. It is almost guaranteed that some listeners will feel let down, and the task is made even more complex by policy issues that fall entirely outside the scope of the Fed. Nevertheless, the way he handles this challenge is sure to reveal a great deal about our new Chair.
For what it is worth, my hope is that he favors the broader, longer term secular approach. This perspective seems especially crucial today, given the current divisions that exist among his fellow FOMC members.
#economy #markets #federalreserve #jacksonhole
Observers generally fall into two distinct camps. The first group wants him to honor the habits of his predecessors by providing explicit forward guidance and explaining his immediate reaction function. Conversely, the second group is hoping for a return to the foundational, secular spirit that originally defined this exclusive conference. Taking this historical route would mean tackling an expanding and intricate array of domestic and policy matters, especially as we navigate massive structural changes fueled by geo-economics and technological innovation.
Finding the perfect middle ground between these two perspectives will be incredibly tough. It is almost guaranteed that some listeners will feel let down, and the task is made even more complex by policy issues that fall entirely outside the scope of the Fed. Nevertheless, the way he handles this challenge is sure to reveal a great deal about our new Chair.
For what it is worth, my hope is that he favors the broader, longer term secular approach. This perspective seems especially crucial today, given the current divisions that exist among his fellow FOMC members.
#economy #markets #federalreserve #jacksonhole
Good morning.
Japan Executes Historic Currency Intervention
Data reported by Bloomberg indicates that the Japanese Ministry of Finance dedicated $96 billion to bolster the yen during the month concluding on August 26. This represents a record-setting one-month expenditure, which was further supported by a highly unusual, synchronized market intervention alongside the US on July 31.
As referenced in the chart below, the Japanese currency briefly rallied to almost 156 against the dollar right after this collaborative move. Since then, however, the yen has depreciated and is now slipping back toward the 160 mark. Throughout the financial community, this specific threshold is widely considered a probable catalyst for additional supportive measures.
At this stage, the primary unknown is whether and when Japan might implement a much broader policy approach. Launching a comprehensive strategy of this magnitude would require coordinated efforts from the Ministry, the Bank of Japan, and the Prime Minister's Office.
#economy #markets #yen #currency #fx
Japan Executes Historic Currency Intervention
Data reported by Bloomberg indicates that the Japanese Ministry of Finance dedicated $96 billion to bolster the yen during the month concluding on August 26. This represents a record-setting one-month expenditure, which was further supported by a highly unusual, synchronized market intervention alongside the US on July 31.
As referenced in the chart below, the Japanese currency briefly rallied to almost 156 against the dollar right after this collaborative move. Since then, however, the yen has depreciated and is now slipping back toward the 160 mark. Throughout the financial community, this specific threshold is widely considered a probable catalyst for additional supportive measures.
At this stage, the primary unknown is whether and when Japan might implement a much broader policy approach. Launching a comprehensive strategy of this magnitude would require coordinated efforts from the Ministry, the Bank of Japan, and the Prime Minister's Office.
#economy #markets #yen #currency #fx
Hello everyone, here is a brief update regarding recent economic statistics. The most recent weekly unemployment numbers continue to highlight the resilience of the U.S. labor market. First time claims for benefits fell to 203,000, which is a noticeable decrease from the 207,000 applications filed during the preceding week. Additionally, this result managed to beat the consensus forecast, which originally projected 208,000 filings.
#economy #matkets #jobs
#economy #matkets #jobs
The recent coverage from CNBC below provides the newest insights into the US mortgage market. It is quite fascinating to observe how home borrowing costs are expanding past their conventional function as a primary gauge for the housing market. Within our present environment, these mortgage rates are adopting much wider social and political significance. This shift reflects a broader trend where economic policy and financial markets are increasingly driven by domestic politics, geopolitics, and national security. This dynamic would become especially pronounced should corporate earnings growth begin to decelerate.
#economy #markwts #housing #mortgages @cnbc
#economy #markwts #housing #mortgages @cnbc
The latest data for the preferred inflation measure used by the Federal Reserve arrived this morning, landing exactly where analysts predicted. During July, the core PCE inflation rate recorded a 0.2% monthly increase alongside a 3.3% annual rise, matching the consensus forecasts perfectly.
When we look at the headline numbers, the monthly rate saw a slight bump to 0.2%, which surpassed the projected 0.1% as well as the previous mark of -0.1%. Even with this monthly uptick, the yearly headline figure held steady at 3.7%.
None of these fresh statistics have altered market expectations regarding a potential Fed interest rate hike in September. The current probability continues to sit around 40%, a figure that I still feel is simply too high.
Taking a glance at the rest of the reports from this morning, consumer spending was shown to be flat. This particular detail reinforces a recent trend of economic activity indicators coming in softer than expected.
#economy #markets #federalreserve #inflation
When we look at the headline numbers, the monthly rate saw a slight bump to 0.2%, which surpassed the projected 0.1% as well as the previous mark of -0.1%. Even with this monthly uptick, the yearly headline figure held steady at 3.7%.
None of these fresh statistics have altered market expectations regarding a potential Fed interest rate hike in September. The current probability continues to sit around 40%, a figure that I still feel is simply too high.
Taking a glance at the rest of the reports from this morning, consumer spending was shown to be flat. This particular detail reinforces a recent trend of economic activity indicators coming in softer than expected.
#economy #markets #federalreserve #inflation
Looking at today's economic updates, we have a pair of reports where US activity fell short of expectations. High mortgage rates continue to dampen buyer demand, leading to a decline in July new home sales. This specific housing challenge is currently drawing a great deal of political and economic attention. On a separate note, the Conference Board Consumer Confidence metric did not meet consensus estimates, dipping to 89.2. This downward shift places even higher stakes on what the upcoming UMich survey will reveal.
#economy #markets #growth #housing #confidence
#economy #markets #growth #housing #confidence
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