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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@JasonBordoff and @OSullivanMeghan have put together a highly engaging analysis examining the ways the ongoing Iran conflict continues to shape the oil market. If you want to better understand these shifting dynamics, their piece is absolutely worth your time.
https://www.foreignaffairs.com/iran/long-shadow-iran-shock
#economy #markets #oil @ForeignAffairs
https://www.foreignaffairs.com/iran/long-shadow-iran-shock
#economy #markets #oil @ForeignAffairs
Here are the primary insights from the UMich US Consumer Sentiment Survey that was published this morning.
Consumer confidence experienced a noticeable setback this month. The preliminary index for August decreased to 51.0, representing a clear drop from the 55.2 reported in July. This result also missed the consensus forecast of 55.0 by a wide margin.
Anxiety regarding the cost of living played a major role in this downturn. When discussing the decline, survey director Joanne Hsu highlighted "notably large reductions… among older consumers, lower-income consumers, and those without a college degree."
In addition, forecasts for inflation over the next year crept up to 4.3%, a shift that mirrors the latest upward swing in gasoline prices. At the same time, the inflation measure for the 5 to 10 year timeframe was recorded at 3.3%.
Even with these economic pressures, there is a silver lining in the report. Consumers are keeping a steady outlook on the job market, as worries surrounding employment have stayed relatively low.
#economy #markets #inflation #employment #affordability
Consumer confidence experienced a noticeable setback this month. The preliminary index for August decreased to 51.0, representing a clear drop from the 55.2 reported in July. This result also missed the consensus forecast of 55.0 by a wide margin.
Anxiety regarding the cost of living played a major role in this downturn. When discussing the decline, survey director Joanne Hsu highlighted "notably large reductions… among older consumers, lower-income consumers, and those without a college degree."
In addition, forecasts for inflation over the next year crept up to 4.3%, a shift that mirrors the latest upward swing in gasoline prices. At the same time, the inflation measure for the 5 to 10 year timeframe was recorded at 3.3%.
Even with these economic pressures, there is a silver lining in the report. Consumers are keeping a steady outlook on the job market, as worries surrounding employment have stayed relatively low.
#economy #markets #inflation #employment #affordability
According to the Bloomberg information provided below, retail sales in the US have failed to meet expectations across every major category. When paired with the milder labor and inflation reports from the past week, these new numbers will once again pull down market anticipation for an interest rate increase this September. Consequently, we can expect a reduction in front-end yields. At the same time, the packed schedule of upcoming corporate and sovereign bond issuances will keep weighing on longer-end yields.
#economy #markets
#economy #markets
According to a recent update from @FT, the US Treasury department reported that Thursday hosted a $25bn auction for 30-year bonds, which produced yields reaching an impressive 5.22 per cent. For a bit of historical context, this represents the highest rate seen in over two decades. The last time yields exceeded this mark was in August 2001, when they paid out at 5.52 per cent. Interestingly, following that specific peak, the government halted 30-year auctions entirely for a period of almost five years.
#economy #markets #bonds #debt
#economy #markets #bonds #debt
As outlined in a recent Bloomberg table, US PPI inflation registered numbers that were either consistent with or lower than consensus forecasts. This metric acts as a key gauge for pipeline cost pressures. When paired with the CPI data released yesterday, today's figures have continued to calm market expectations regarding a Fed interest rate hike this September. Consequently, the implied probability for such an increase has dropped to roughly one-third.
#economy #markets #inflation #federalreserve
#economy #markets #inflation #federalreserve
Financial markets have responded with quiet but mild optimism to the newly published US inflation data for July. Following the release, bond yields dipped slightly, and the implied probability of a Fed interest rate hike this September experienced a minor decrease. This subdued reaction makes perfect sense, as the Consumer Price Index figures aligned exactly with broad consensus forecasts. Specifically, the headline CPI reached 3.4% YoY and saw a 0.1% MoM increase. At the same time, the core CPI climbed 2.5% YoY alongside a 0.2% MoM rise.
#economy #inflation #markets #federalreserve
#economy #inflation #markets #federalreserve
Trying to plan government, corporate, or household budgets is certainly no simple task when dealing with such unpredictable market conditions. We recently saw an incredibly volatile price cycle with WTI crude, which completed a major reversal in less than two weeks. After experiencing an initial 18% surge that brought the price from $78 up to $93, the commodity quickly plunged right back down to $79.
#economy #oil #markets
#economy #oil #markets
Recent coverage from Bloomberg highlights a notable transformation taking place across GCC states. Although these nations have long been recognized as massive providers of global capital, which includes substantial support for tech, they are now also emerging as active borrowers. This shift in financial strategy is intended to finance vital domestic strategic infrastructure.
To explore this transition in greater detail, please feel free to read the FT column I published last March at https://t.co/UefZGBDNo2
#economy #markets #capitalmarkets @FT
To explore this transition in greater detail, please feel free to read the FT column I published last March at https://t.co/UefZGBDNo2
#economy #markets #capitalmarkets @FT
Sometimes people truly create their own setbacks. In the aftermath of the World Cup final, a small group of Argentine players and supporters managed to bring disciplinary measures entirely upon themselves. The situation highlighted here serves as merely a single instance among numerous penalties of this nature.
#worldcup @fifaworldcup @fifa
#worldcup @fifaworldcup @fifa
Wishing you a good morning. The latest headline is a helpful reminder that even though the yen currently appears to be holding steady at roughly 162 per US dollar, the complete impact of the situation has not yet materialized. For instance, a notable vulnerability for Japan right now is the significant chance that companies might be encouraged to launch a series of price increases. If these commercial price hikes lead to fresh doubts regarding the anticipated policy reactions from officials, it might easily trigger another cycle of currency depreciation. Fortunately, a clear remedy exists, just as we have explored in previous discussions. Resolving this challenge will require a deeply synchronized and sweeping policy strategy executed jointly by the Bank of Japan, the Ministry of Finance, and the Prime Minister's office.
#economy #markets #japan #yen #boj #currency #fx #inflation #apple
#economy #markets #japan #yen #boj #currency #fx #inflation #apple
According to the high-frequency economic data published this morning, the United States labor market continues to demonstrate notable resilience. In the most recent week, initial jobless claims decreased by 8,000 to reach a total of 208,000. This decline places the actual numbers lower than the consensus forecast, which had anticipated 217,000 claims.
#economy #jobs #employment #markets
#economy #jobs #employment #markets
The South Korean authorities are having to pull off a delicate balancing act: tackle inflation while simultaneously head off the threat of excessive financial volatility that can lead to disorderly deleveraging.
In its first rate hike in three and a half years, the central bank lifted its policy rate by 25 basis points to 2.75% and signaled that more hikes may be on the way.
The Korean authorities also placed a ban on new listings of (typically leveraged, tech-focused) ETFs and increased deposit requirements.
How this plays out over the coming weeks is worth watching: It's not an easy mix to manage, and the latter, if mismanaged, could have some cross-border spillovers.
#economy #markets #Korea #SouthKorea #inflation #volatility
In its first rate hike in three and a half years, the central bank lifted its policy rate by 25 basis points to 2.75% and signaled that more hikes may be on the way.
The Korean authorities also placed a ban on new listings of (typically leveraged, tech-focused) ETFs and increased deposit requirements.
How this plays out over the coming weeks is worth watching: It's not an easy mix to manage, and the latter, if mismanaged, could have some cross-border spillovers.
#economy #markets #Korea #SouthKorea #inflation #volatility
This list, from the Federal Reserve’s website, should leave no doubt that its new Chair, Kevin Warsh, is serious about reforming, transforming, and enhancing the world’s most powerful central bank.
It’s not just about the exceptional expertise, experience, and reputation of the individuals selected. It’s also about their ability to drive meaningful buy-in for improving areas that have led to recent operational and strategic slippages, thereby undermining the Federal Reserve's overall effectiveness, credibility, and political independence.
#federalreserve #centralbanks #economy #markets @federalreserve
It’s not just about the exceptional expertise, experience, and reputation of the individuals selected. It’s also about their ability to drive meaningful buy-in for improving areas that have led to recent operational and strategic slippages, thereby undermining the Federal Reserve's overall effectiveness, credibility, and political independence.
#federalreserve #centralbanks #economy #markets @federalreserve
It is easy to see why numerous fans feel Egypt was treated unfairly when a highly unusual VAR decision erased their spectacular second goal. However, rather than allowing the frustration of a disallowed score to disrupt their focus, the Egyptian squad showed remarkable resilience. They simply kept their momentum going and successfully found the back of the net once again.
#egypt #worldcup
#egypt #worldcup
It is wonderfully encouraging news that Kevin Warsh, the new Federal Reserve Chair, has selected Mervyn King to co-chair one of the reform task forces. King brings a wealth of experience to the role as the former Governor of the Bank of England. As you may have already read or heard from me, this development perfectly aligns with a perspective I have been sharing for quite some time. I have consistently maintained that the Federal Reserve stands to gain valuable insights by studying the methods of other central banks, with a special emphasis on the Bank of England.
There are several specific practices from these international peers that serve as excellent models for improvement. For example, bringing external members onto the Monetary Policy Committee (MPC) is a highly effective strategy to actively counter groupthink. Additionally, the use of scenario analyses and the publication of the inflation report are proven ways to deliver information that is genuinely better in quality, rather than simply providing the public with a larger volume of data.
#economy #markets #centralbanks #federalreserve @bankofengland
There are several specific practices from these international peers that serve as excellent models for improvement. For example, bringing external members onto the Monetary Policy Committee (MPC) is a highly effective strategy to actively counter groupthink. Additionally, the use of scenario analyses and the publication of the inflation report are proven ways to deliver information that is genuinely better in quality, rather than simply providing the public with a larger volume of data.
#economy #markets #centralbanks #federalreserve @bankofengland
Enthusiasm for the global soccer tournament is practically inescapable following the massive surprises that took place yesterday. In a pair of stunning outcomes, Morocco managed to send the Netherlands packing, while Paraguay successfully eliminated Germany. You can truly feel the World Cup passion everywhere you go. As proof, the bustling energy in this scene was captured right on the streets of NY at the early hour of 7 a.m.
#worldcup @FIFAWorldCup @fifacom_ar #egypt
#worldcup @FIFAWorldCup @fifacom_ar #egypt
Wishing you a very good morning. There are a couple of key developments to keep an eye on right now.
First, the Japanese yen has fallen to a fresh 40-year low of ¥162.30 versus the U.S. dollar. This downward trend in the exchange rate is placing an increasing amount of pressure on authorities.
Second, a new batch of United States employment statistics begins rolling out today. This sequence of labor market publications will eventually wrap up when the official monthly jobs report is issued tomorrow.
#economy #jobs #yen #japan #markets
First, the Japanese yen has fallen to a fresh 40-year low of ¥162.30 versus the U.S. dollar. This downward trend in the exchange rate is placing an increasing amount of pressure on authorities.
Second, a new batch of United States employment statistics begins rolling out today. This sequence of labor market publications will eventually wrap up when the official monthly jobs report is issued tomorrow.
#economy #jobs #yen #japan #markets
Yesterday, US Treasury Secretary Scott Bessent took the stage at the Economic Club of New York to outline the key drivers behind America's economic statecraft. After wrapping up his primary address, he engaged in a Q&A session where he offered a rather memorable observation. The Secretary pointed out that the bond market has historically removed more governments than howitzers. Please check back soon, as we will be sharing further updates on his remarks shortly.
#economy #geoeconomics #markets @USTreasury @SecScottBessent @EconClubNY
#economy #geoeconomics #markets @USTreasury @SecScottBessent @EconClubNY
A highly serious forecast for developing economies has been outlined by the World Bank within their most recent global outlook report. Please excuse the shaky underlining, which is simply the result of my commute on a very turbulent train today.
#economy #markets #developingcountries @WorldBankGroup
#economy #markets #developingcountries @WorldBankGroup
Global central banks experienced an exceptionally active week, highlighted by a major decision from the Bank of Japan. The institution raised interest rates to 1%, establishing a peak not seen in 31 years, and policymakers cautioned that additional increases are approaching. Although this move proved much more hawkish than consensus expectations, the announcement did not shift the currency. The yen remained rigidly fixed around 160 per US dollar, which ultimately did very little to solve the ongoing policy dilemma.
#economy #japan #markets #boj #centralbanks
#economy #japan #markets #boj #centralbanks
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