Mohamed El-Erian

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

Still on what would have been deemed unlikely if not unthinkable not so long ago... 👇🏼 #economy #markets #energy https://t.co/7esDzs7NcH

French versus Italian sovereign spreads: What Bloomberg is reporting here was thought unlikely, if not unthinkable, not so long ago. #economy #markets #europe #france #italy https://t.co/MEMDAXSGGV

Good morning. As reported below by the WSJ, the US budget deficit climbed to nearly $2 trillion ($1.993 trillion) for the fiscal year ending September 30. What remains historically notable is that the US has continued to run a deficit of around 6% of GDP despite solid economic growth and a robust labor market. #economy #markets @WSJ

FYI, on the growing risks of repeated US interventions to sway market pricing: https://t.co/36nBr4ORK1 @FT #economy #markets https://t.co/OcYTddGvF9

Always a great time catching up with Jeremy Vine. A true superstar in every way! @theJeremyVine @radio2 @JeremyVineOn5 https://t.co/dZ8Xjbi5Hu

One of my favorite family photos just popped up on my phone. https://t.co/3OxEHcpmkH

As French yields continue to climb and pull other European yields higher, there's a question on many people's minds: What is the circuit breaker, and when does it kick in? Is it endogenous? If so, we are likely still a ways away from its trigger point, especially given how ex-ante imbalances in the US bond market continue to exert upward global pressure. Or is it policy-induced? If so, and when it comes (also uncertain), will authorities use the right tool, or a second-best option that brings unintended consequences and collateral damage? #economy #markets #bonds #yields #europe

European government bond yields continue their upward march this morning. #economy #bonds #markets #europe https://t.co/KfLauyCVqH

Good morning. FYI, the link to yesterday's conversation with Wilfred Frost on Sky News. https://t.co/8ZCAgl0Z7I #economy #uk #markets #budget @WilfredFrost @SkyNews https://t.co/R1Y7S3x0nQ

The good news: US average retail prices for both gasoline and diesel have pulled back from their recent peaks. The less good news: both remain elevated and face an uncertain outlook. AAA data below. #economy #markets #gas #diesel #energy https://t.co/8ue41ZiQy2

Following up on the earlier UK budget note: The 30-year gilt yield now carries a 6% handle, reaching its highest level in 28 years. #economy #markets #bonds #uk #yields https://t.co/XExmwZVA4b

This sharp rise in UK gilt yields—with the 10-year up another 7 bps this morning to 5.45%—further complicates an already difficult UK budget formulation. Indeed, this may well be the toughest fiscal formulation challenge in years. #economy #markets #uk #budget #yields https://t.co/6VxoJZp7uD

A big "thank you" to Wilfred Frost for the interesting conversation on the UK economy. #economy #uk #markets @WilfredFrost @SkyNews https://t.co/Owlm6Byc3X

Further to yesterday's chart of the US yield curve, this one from The Wall Street Journal details the one-month round trip in market expectations for an October Fed rate hike. Is a "hall of mirrors" feedback loop at play here, or is this simply correlation? #economy #markets #federalreseeve @wsj

Good morning. Europe is facing higher government bond yields yet again. France, now the "high beta" economy yield-wise, is leading a regional rise that increasingly reflects a two-way dynamic with US Treasuries (albeit with varying sensitivities). #economy #bonds #yields #markets https://t.co/o1Vdacd7Wy

Congratulations to all the authors of the books shortlisted for this year’s Financial Times and Standard Chartered Business Book of the Year Award! #bbya #bbya26 #bbya2026 @FT https://t.co/E5QVFElUdP

Unusual volatility in the US yield curve: Look at this one-month round trip across both the 2s10s and 2s30s curves: The sharp flattening down to September lows was followed by an immediate, full retracement! (Bloomberg charts.) #economy #markets #yields #bonds https://t.co/KDyNV12i3D

Emmanuel Moulin, the Governor of the Banque de France (central bank) to the Financial Times. 👇 #France #markets #economy #bonds #yields https://t.co/icvskcER42

Speaking of higher borrowing costs and vulnerable sectors: This from the front page of today's WSJ.👇 #economy #markets #housing #bonds #yields #mortgages @WSJ https://t.co/wolgoOZkpY

Good morning. From the FT: "A sharp sell-off in US government bonds is starting to reverberate across corporate America, forcing companies to overhaul their borrowing plans and even raising the spectre of defaults among the most lowly rated businesses." Remember the historical playbook: The most vulnerable sectors get hit first and hardest. Then, if elevated borrowing costs persist, the pressure both migrates up the curve and spreads across the broader economy, domestically and internationally. #economy #markets #bonds #yields @FT

On two stubborn market indicators with broad influence: 1. Brent above $100 , even with Strait of Hormuz flows nearly back to pre-war levels. The important comments by Aramco’s CEO provide part of the explanation: massive drawdowns have left both corporate and sovereign inventories "scarily thin," and restocking will take significant time. 2. 10-year US Treasury yield at 5.30% despite last week's cooling data and dovish Fedspeak (CNBC chart). This reflects the importance of the structural supply/demand mismatch I've been harping on: surging long-end issuance and some retreat in traditionally reliable buyers. #economy #markets #oil #energy #bo…

Contagion risk is back in Europe, but with a twist compared to 14 years ago. Rather than originating in the periphery, the pressure point is France, right at the core: The surge in French yields over recent weeks is weighing on the euro (CNBC chart below), adding to the policy challenges facing the ECB. #economy #markets #euro #eurozone #fx #bonds #yields

Last week was mainly about bond market volatility, with evidence of spillover, and continued equity market resilience due to data and Fedspeak. This week, we get the Fed minutes and lots of interesting data. For more details, please see one of the links below for my weekly note on the global economy and markets. https://t.co/DlNpxApS0q https://t.co/m0abdAaDXo #economy #markets

The Jets are beating themselves yet again. Three separate interceptions wiped off the board because of sloppy penalties, just handing the game right over to Chicago. It's infuriating to watch. @nyjets @ChicagoBears @NFL #jets

My beloved New York Jets finally got an interception, their first since 2024 (longest drought in NFL history). Sadly, it's the only bright spot in this first half against the Chicago Bears. @nyjets #jets @ChicagoBears @nfl https://t.co/rYmCSD64lu

The Weekly Look at the Global Economy and Markets

The Context The transition from September to October brought a brief respite for weary fixed-income investors – even as tech stocks pushed the NASDAQ to a new record high. That said, the structural repricing of sovereign risk began to have a greater impact on vulnerable credits, whether high-yield corporates or more rate-sensitive G7 economies such as France. Thanks for reading! Subscribe for free to receive new posts and support my work. Looking back at the past week, the defining feature of the financial landscape was the continued volatility across government bond markets. We saw sovereign yields reach multi-decade highs across a swathe…

This week’s massive market repricing of near-term Federal Reserve policy action: The market-based probability of an October Fed rate hike at the next FOMC meeting in three weeks has plummeted from 70% to 23% over just the last 3 days (CNBC below). The probability of a December 9th hike has fallen from 95% to 86%. #economy #markets #federalreserve