Mohamed El-Erian

A great chart from John Authers illustrating the unusual decoupling between US consumer confidence and the manufacturing sector. #economy #markets @johnauthers https://t.co/cyMLGmtrcq

US PCE data is out. The Fed’s favorite monthly inflation measure was better than expected for core (0.2%) and in line at the headline level (0.3%). #economy #inflation #markets

News out of Europe that will not be welcomed by the ECB: The latest inflation prints (3.4% for France, 4.1% for Italy, and 5.0% for Spain). French sovereign spreads now trading 120 basis points over Germany. #economy #europe #markets #inflation #France #Italy #Spain https://t.co/BpwyJ6F2ZN

As illustrated in this CNBC chart, it has been quite a month for the fixed-income market. The 10-year yield has moved up by around 50 bps to its highest level since 2007 (with a slightly larger move for the 2-year, while the 30-year has reached levels not seen since 2002). Such a move raises two immediate questions for the global economy and markets: Are we now in a new regime of protracted elevated rates? Have we already seen the bulk of the spillovers onto other risk factors and the broader economy? For what it's worth, and for the reasons detailed earlier, my answers would be yes, and no. #economy #markets #yields #bonds

The front page of today's Wall Street Journal. #economy #markets #jobs #affordability #inequality #populism https://t.co/cRLz6XZOvL

This is consistent with my prior posts on two major forces driving today's US Treasury market, fueling both higher and more volatile yields: Fundamental Supply/Demand Imbalance: Greater demand for bond financing (across governments, tech, and other corporates) met with a less consistent pool of long-term buyers. Market Composition: The growing footprint of "fast money" participants as a result. #economy #bonds #markets #yields

The initial reactions in my meeting—and this is before anyone has had the chance to read the actual document—are all over the map. The two extremes: This self- and group-policing will prove effective, offering greater upside for the industry and investors; and It will fail, triggering a forced "sudden stop" that damages the industry, investors, and broader society. One thing is certain: This debate will not end anytime soon! (CBS headline below.) #economy #ai #tech #si #markets

This is not the first trading session where sovereign bond yields and oil prices have decoupled. In fact, it is happening with greater frequency—a reminder that: • The protracted surge in yields is driven by forces far beyond energy markets; and • It is increasingly only a matter of time before borrowing costs for households and corporates face the additional headwind of even wider credit spreads. #economy #markets

Despite weaker-than-anticipated US economic data across both soft and hard metrics, US yields are rising yet again. The plunge in consumer confidence brought key measures well below consensus forecasts, with the overall index dropping to 81.9 (vs. 89.0 expected), current conditions to 109.3 (vs. 121.2), and expectations to 63.6 (vs. 68.5). Meanwhile, job vacancies came in lower than anticipated at 7.228 million (vs. 7.27 million expected). Despite such data, yields are up across the board, with the 30-year US Treasury bond hitting its highest level since 2002. #economy #markets

A reminder (below) of where the US Treasury curve is: With the exception of the 2-year, every maturity on this Bloomberg screen is now above 5%. This poses a tricky question for a range of investors: Step in to lock in the highest nominal and real yields in years, or stay on the sidelines as the market contends with both a structural supply/demand imbalance among longer-term participants and unsettling volatility as "fast money" increasingly fills the void? #economy #bonds #markets #yields a

US Treasury yields have stabilized today, at least for now, following the sharp surge across all maturities (WSJ chart below). #economy #markets #bonds #yields https://t.co/wAfbyTAecw

HT LS. #markets #economy #bonds #yields

As detailed in my latest PS column (link below), "two secular trends will shape finance in the years ahead, one powered from the bottom up by transformative technological innovations, and the other from the top down by geoeconomic influences. Managing each will require major adaptations from financial firms and their regulators, a task complicated by the fact that the two trends are pulling in opposite directions, and their resolution is not yet clear." https://t.co/RvUBoA92bK #economy #markets #finance #tech #geoeconomics

The links to this morning's conversation on CNBC's Squawk Box. Thank you, Andrew and Becky, for the interesting conversation. https://t.co/ipW3M8JaXF https://t.co/j1NDjbjsIA @CNBC @SquawkCNBC #economy #markets #cnbc @BeckyQuick @andrewrsorkin https://t.co/FXVKAipNrz

Echoes of the early 1980s US policy mix? With no signs of meaningful fiscal consolidation, markets are increasingly turning to the Federal Reserve to counter price shocks. (Please see my FT column from a week ago for details.) The longer this dynamic persists, the more likely the overall policy mix is to resemble that of the early 1980s: overly reliant on monetary tightening while lacking fiscal restraint—a combination that tends to bolster the US dollar and pressure interest-rate-sensitive sectors, both headwinds to balanced economic growth. In terms of the historical comparison, the silver lining is that today’s positive productivity shock …

While on yields, keep an eye on three areas of G7 fragility: France, Japan and UK. In Japan, the currency remains under pressure even as 10-year JGB yields flirt with 3.10%, their highest level in three decades. Much like US bond developments rarely stay confined to the US, Japanese bond and currency pressures have spillovers. The longer these conditions persist, the more they risk depriving the US Treasury market of a reliable, long-term buyer. #economy #markets #bonds #yields

Good morning. In markets, US bond yields are back in focus, with the 10-year hitting 5.22%, its highest level since 2002 -- as Brent oil approaches $110. (CNBC chart below.) #economy #markets #oil #energy #bonds #yields https://t.co/cq1gTj0mnm

Yet another emotional roller coaster that ends in yet another avoidable loss. The Jets certainly know how to consistently test our loyalty ... and our rationality. #jets @nyjets

@PhumlaniMMajozi Thanks so much.

A friend working in the space sector suggested I replace my long-standing use of ROW (Rest of World -- see below) with ROE (Rest of Earth). The problem? For many of us, ROE stands for Return on Equity. Does anyone have suggestions for an alternative?

Last week, US equities defied gravity and showed remarkable resilience even as many Treasury bond yields surged 5% and the geopolitical landscape remained structurally uncertain. Please have a look at my latest weekly review for details on this and other divergences, the fluid global economic order, and what to watch in the week ahead (either link): https://t.co/YU0Ru2IqMS https://t.co/UZQUHw7IhM #economy #markets

Further to the prior post: It is noteworthy that US government bond yields reversed course and are now higher on the day. (CNBC chart below.) #economy #markets #yields #bonds https://t.co/w8fNf5URs3

The divergence between consumer sentiment and economic activity data is widening: The UMich consumer sentiment index fell to 48.1 in September, driven in part by a jump in one-year inflation expectations to 4.6% (up from 4.0% in August). Five-to-ten-year inflation expectations also rose, reaching 3.4%. Also of note, the index's outlook sub-component dropped to its lowest level since 2022. (Bloomberg charts below.) #economy #markets

This chart from John Authers always-insightful note reminds us that the (mainly but not exclusively) US-led yield surge is now a generalized phenomenon, especially when it comes to reaching multi-decade levels. #economy #bonds #markets #yields @johnauthers https://t.co/A6TYhoqNtJ

Superb appointment. #imf #economy @IMFNews @KGeorgieva @Isabel_Schnabel

It wouldn't surprise me if the output of the Federal Reserve’s five task forces, along with the broader reforms led by Kevin Warsh, becomes a global blueprint for central banking. Already, Chair Warsh’s pushback against what “forward guidance” has devolved into is already gaining traction abroad. #economy #markets #federalreserve #reform

Flying under many radars for now, but probably not for long: The Japanese Yen has weakened back to 159 per U.S. dollar (CNBC chart), approaching the established FX intervention zone. This matters far beyond Japan for a key reason right now: Japanese foreign exchange intervention typically involves selling US securities to buy Yen, potentially adding yield pressures to an already sensitive Treasury market. #economy #markets #japan #yen #bonds #yields

With yields edging higher again this morning, the entire US Treasury yield curve from 5- to 30-year maturities is now trading above 5%. (Image from the @FT below.) #economy #markets #bonds #yields https://t.co/fdixe1enAd

This old photo, which just popped up on my phone, remains one of my absolute favorites: walking my young daughter to school -- something that, prior to a major career course correction in 2014, I simply didn't do enough. #daughter #fatherdaughterlove #fatherdaughter https://t.co/DIfeDIO9DE

Three of my takeaways from this Financial Times reporting (attached) on record bond issuance by emerging economies: It adds at the margin to pressures on global bond yields, even though the overall issuance volumes remain significantly smaller than those coming from advanced economies and tech companies. It has been impacted by atypical issuance from Gulf Cooperation Council (GCC) countries as they work to re-equip and expand their energy supply and infrastructure networks. It also reflects a healthy appetite among investors, bolstered by the multi-year reforms that many, though not all, emerging economies have pursued to strengthen their eco…