Mohamed El-Erian

This chart is from The Economist's article on "the fast-growing stock of AI-related debt." Without a matching rise in loanable funds, persistent rate pressure will likely crowd out rate-sensitive, non-tech sectors. #economy #markets #bonds #yields @TheEconomist https://t.co/zbJNors0XI

From the @FT: "Cracks are appearing in America’s debt-laden $10tn AI infrastructure boom as project delays, public backlash and shaky investor confidence bring a reckoning for the data centre build-out underpinning the US economy." IMO, what makes all these issues even more interesting is that no matter how they evolve, there are significant economic, financial, social, and geopolitical implications #economy #markets #tech #ai

This, from the Financial Times, highlights a core reality of today's geo-economic era: Multi-causal relationships between economics, domestic politics, and geopolitics. #economy #markets #Geopolitics #geoeconomics @FT https://t.co/UK3CPCu5e9

The math of a protracted budget deficit of around 6% PLUS the refinancing of maturing debt at higher rates: #economy #markets #debt #yields https://t.co/PhUJwQvf37

This past week brought market counter-currents: bond yields fell despite hotter inflation data, while equities saw sharp volatility and dispersion as tech sold off and rotation accelerated. Meanwhile, broader geo-economic pressures, from oil prices to geo-economic tensions, remained in play. As we enter a dense week of economic data and corporate earnings, the theme of economic resilience faces an important empirical test. For details, please use one of the following links for my weekly note on the global economy and markets: https://t.co/Ak7dVy7Lnn https://t.co/eKnKFvHluE

The link to yesterday's conversation with Leslie Picker on Closing Bell. https://t.co/fU79N5hIj6 #economy #markets @cnbc @LesliePicker @CNBCClosingBell https://t.co/RXXfPIeZm8

An illustration below from the Wall Street Journal of the cause and effect of the ongoing rotation trade in the US stock market. (Please see my post from yesterday about what I call the (1-x) qualification to this rotation trade.) #economy #markets #investors #investing #tech #stocks @wsj

As this mix of charts from CNBC and Bloomberg illustrates, one of the few areas of economic and financial relief this past week came from lower government bond yields. More to follow in my weekly look at global economy and markets. #economy #markets #stocks #bonds #oil #gold https://t.co/3bG9pFMRcS

Global economic activity has navigated higher costs impressively well via a combination of income growth, savings and inventory drawdowns, debt, efficiency gains, slower margin growth, and selective price pass-through. But the longer the inflation hit persists, the greater the risk to growth—as this @FT article on airlines discusses. #growth #inflation #markets

My thanks to Leslie Picker for an interesting conversation on CNBC’s Closing Bell. @CNBC #economy #markets @LesliePicker https://t.co/BtqYaN1wWx

The (1-x) qualification to the rotation trade within the stock market away from tech that many seem to favor: Given tech's role in recent years as an engine of economic growth and a magnet for domestic and international capital, the wellbeing of the non-tech sector (1-x) could well turn out to be, economically and technically, postively correlated to the health of tech stocks (x). #economy #investors #investing #markets #tech #rotation

Another good US economic number: September industrial production expanded by 0.7%, beating the 0.4% consensus forecast. This comes on the heels of yesterday’s strong retail sales and labor market data. Meanwhile, today’s higher-than-expected rise in September import prices (+1.1%) reinforces the message from this week’s hot CPI and PPI readings. #economy #markets #growth #inflation

Even though Federal Reserve Chair Warsh emphasized that he doesn’t "prejudge meetings" and that the Fed is no longer in the business of forward guidance, markets have interpreted his remarks at the IMF meetings in Thailand as dovish when it comes to an October rate action. Specifically, the market's implied probability of an October hike is now under 20%; that of a 25 bps December hike is near 90%, and 2.5 hikes are priced in by mid-2027. #economy #markets #federalreserve

From the @FT: "Prices of bonds issued to fund prominent data centres where Meta, Nvidia, Oracle and others will become tenants — such as “Hyperion” and “Project Excalibur” — have fallen well below par in recent weeks. Investors are also dumping debt issued by so-called neocloud companies — of which the best known is Nvidia-backed CoreWeave — which have been the most aggressive in how they finance their AI build-out." #economy #markets #bonds #DataCentres

Once seen as a conduit for better global policy coordination because of its broader representation, the G20 has struggled in recent years to agree on a joint communiqué, let alone act as a conductor of collective action to address global challenges. Today's meeting in Thailand on the sidelines of the IMF/World Bank annual meetings fits this pattern. (Below is from Nikkei Asia.) #economy #Markets #G20 #IMF #worldbank

Why are US government bond yields falling despite hotter-than-expected CPI and PPI inflation prints (CNBC chart below)? I suspect it comes down to two main drivers, with the second having more implications for the well-being of the US and global economies: A flight to quality out of formerly high-flying tech stocks that are now coming under pressure—a move reinforced by multi-year highs in nominal yields and emerging pockets of credit stress in the most vulnerable segments. Concerns over the robustness of tech as one of the two primary engines of US economic growth. #economy #growth #inflation #markets #bonds #yields

Yesterday’s hot US CPI inflation made headlines well beyond the financial media. Today’s PPI data is even more striking, both in absolute levels and relative to consensus forecasts: • Headline PPI: Jumped 1.3% in Sept (highest since March 2022, right after Russia's invasion of Ukraine pushed energy and food prices much higher) → Annual PPI inflation is now running at 6.3%, well above the consensus forecast of 5.4%. • Core PPI: Rose 0.7% in Sept → Annual running at 5.0% versus the 4.4% consensus expectation. The Twist: Despite these hot numbers, the US 10-year yield is down at 5.06% rather than trading higher. More to follow. #economy #markets…

Of note this early morning: the yield on 10-year US government bonds has fallen sharply, trading just below 5.10%. #economy #markets #bonds #yields https://t.co/Dd9VLyFsNF

Today’s hotter-than-expected US CPI inflation print initially pushed US yields higher and increased the market probability of an October rate hike by the Federal Reserve—both of which have moderated during the trading session. In terms of specifics, headline inflation rose 0.6% in September, lifting the annual rate from 3.4% in August to 3.7%. The core inflation measures came in at 0.3% and 2.6%, respectively. #economy #markets #inflation

From the WSJ article, "China’s Weakening Economy Is Creating a Lost Generation." #economy #markets @WSJ #china https://t.co/PGOScAmGbr

A great lecture by Professor Katy Milkman at a special event in Cambridge. Thank you, Kamiar and Queens', for the photos. @QueensCam @Cambridge_Uni @katy_milkman https://t.co/covgIhD7RH

Good morning. Here's the usual summary table from the just-released World Economic Outlook from the IMF. More to follow. #economy #markets @IMFNews https://t.co/lptAHOJon5

Good morning. Where do G-7 sovereign yields stand entering the new week? Here’s the 10-year government debt lineup from the WSJ. #economy #markets #bonds #yields https://t.co/JSRcursLeG

We are coming off a curious week of economic and financial dualism ... and are now looking at a packed one featuring US inflation data, lots of other global releases, and the IMF-World Bank annual meetings. For details, please use one of the following links to read my Weekly Look at the Global Economy and Markets: https://t.co/ZhJEE1Z7HQ https://t.co/y5uIsbjd2r #economy #markets

The Weekly Look at the Global Economy and Markets

The Context We are coming off a curious week in which more of the same was accompanied by developments that, not so long ago, were considered unlikely, if not unthinkable. Thanks for reading! Subscribe for free to receive new posts and support my work. We continued to see new record highs for US equity indices, driven almost exclusively by narrow momentum in the technology sector. Conversely, we also saw new multidecade-high government bond yields in a growing number of advanced economies. Meanwhile, with the continued stalemate between the US and Iran, oil prices remained elevated (with Brent above $100 a barrel). On the economic front, t…

A thoroughly enjoyable play exploring John Maynard Keynes, the man, his works, and his era.. The scenes depicting the battle of ideas between Keynes and Hayek are brilliantly executed. #economy #economics #keynes @TRH_London https://t.co/pt0qEStxqC

The cover of this week's edition of The Economist magazine. #economy #bonds #markets @TheEconomist https://t.co/kTKPcbd1uH

With diesel back under the spotlight, please find below Google's summary of price movements over the last year. Underlying this is what has become an increasingly influential, multi-directional causal relationship between geopolitics, domestic politics, and economics. For example, as geopolitical tensions drove diesel prices higher, the negative economic impact began affecting domestic politics. That, in turn, increasingly influenced economic policies and, as illustrated by yesterday's US-Russia announcements, geopolitical decisions as well. #economy #geoeconomics #energy #diesel

The reaction of European governments will be fascinating. #economy #markets #energy #diesel @cnbc https://t.co/L6Iw3HKzQA

Posted earlier: FYI, on the growing risks of repeated US interventions to sway market pricing: https://t.co/36nBr4ORK1 @FT #economy #markets