Mohamed El-Erian

A "fever" or a market attempt at a "controlled burn:" How you think about the global surge in yields matters. Here's why: https://t.co/A2qbvplRhG #economy #markets @TheEconomist #bonds #yields

With US 10-year government bond yields crossing the 5% threshold, today's move up is even more dramatic in higher-beta G7 sovereign bonds like UK gilts. (CNBC and Bloomberg data below.) #economy #markets #bonds #uk https://t.co/xfdh79q3W4

For those interested in what China is offering developing countries and how it seeks to influence them: Here are key excerpts from President Xi's BRICS Summit statement: "Cementing the Foundation for BRICS Cooperation and Bolstering the Strength of the Global South." #economy #markets #brics #china

Two notables: Markets are now pricing in a 90% probability of a Fed rate hike this week. The national average price of diesel in the US has risen to $6.25 a gallon. #federalreserve #markets #economy #diesel

Good morning. Further to yesterday’s post on stocks (below): Futures currently indicate that the tech-heavy Nasdaq is set to open down nearly 2%. Note that this is another area where divergence is likely IF, and it is a big IF, there is a coordinated deceleration in AI development. Specifically, a possible slowdown in the upper revenue layers need not trigger an equivalent slowdown in broader tech-related economic activity as (i) frontier models are not required for many commercial applications and, (ii) on the tech input side, numerous activities remain supply- (rather than demand-) constrained. #economy #markets #stocks #ai

Another season, another test of loyalty. Ready for Jets football ... this time, with expectations set safely below sea level. #jets @nyjets https://t.co/DBRBrpSauS

Good morning. This week’s Federal Reserve policy meeting may well be the trickiest in years. Ironically, it’s less about what’s happening in the economy and more about a sudden shift in rate-hike expectations, driven by thre surge in yields ... that has less to do with the Fed and more to do with the growing ex-ante imbalance between demand for bond financing and its supply. #economy #markets #federalreserve

Escalating Middle East disruptions triggered a sharp energy spike and pushed sovereign borrowing higher worldwide. Despite in-line US CPI data, markets are now pricing a greater than 80% probability of a rate hike on Wednesday, facing the Federal Reserve with a possible lose-lose dilemma. This comes as pivotal policy decisions from the Bank of England and Bank of Japan loom, along with a heavy schedule of data releases. For details on all this and more, here are the two links to the Weekly Note on the Global Economy and Market (either works). https://t.co/d9Qau2LVXZ https://t.co/Ff6VT6SChg #eonomy #markets

Further to the prior post on US inflation: Headline CPI rose 0.4% in August, matching consensus, while core inflation exceeded expectations at 0.3%. Immediate market reactions include a rise in yields and an increase to above 80% in market expectations for a rate hike next week. #economy #inflation #markets #federalreserve

It’s CPI Friday in the US—ahead of next week's finely balanced Federal Reserve rate decision. Consensus is looking for: Headline monthly inflation of 0.4% (3.4% annual), and Core of 0.2% (2.4% annual). The monthly core reading is key here. Anything above 0.2 something would likely rattle yet again market rate expectations (currently pricing a September hike probability just below 70%), while below 0.2% would moderate them. #economy #federalreserve #inflation #cpi #markegs

Good morning. Setting another record, the US national average price of diesel just crossed $6 a gallon (AAA table below). While less visible to many than the gasoline we put in our cars, diesel is a critical economic input. It fuels the trucks, cargo trains, and farm equipment that produce/transport much of what we consume. #economy #gas #diesel #markets

Today’s price action highlights the resilience of the US equity market: It has contained losses to under 1% so far, even as oil has surged 6% and 10-year Treasury yields have jumped 11 bps. Impressive corporate earnings have provided vital insulation for the stock market, alongside the remarkably limited spillover—so far—from interest rate risk to credit risk. How this evolves will largely depend on whether higher yields weaken the economy, reduce financing availability, and/or trigger pockets of deleveraging. #economy #stocks #investing #investors #markets #bonds

The global surge in bond yields isn't just a market issue. It carries immediate socio-political consequences. Case in point: the average 30-year US mortgage rate has just breached 7%. (CNBC reporting below). #markets #economy #mortgages #housing #yields #bonds https://t.co/ukfWxOQu1U

The UK gilt market’s high beta is on display again today as 10-year yields surge to nearly 5.40% amid this global sell-off—and this in the run-up to the government delivering its first, highly anticipated budget on October 28. For the reasons detailed in my April Financial Times column on "who lost the UK bond market" (link below), this structural vulnerability has been building for years and now has self-feeding dynamics: sluggish productivity colliding with expanding deficits and the refinancing of debt last incurred at lower borrowing costs, making both economic growth and fiscal sustainability even harder to achieve. https://t.co/8Sy7XSJZ…

If these moves and levels persist, let alone get worse, they will ring alarm bells across most economies as they: Intensify affordability pressures, Fuel headwinds to growth, Worsen inequality, Weaken fiscal dynamics, and Add to financial instability risks. #economy #markets #oil #yields

“The decision we took today was a no-brainer." From a must-watch (as usual): ECB President Christine Lagarde’s ongoing press conference following the central bank's decision to hike rates by 25 basis points. More to follow. #economy #markets #ecb @ecb @Lagarde #inflation #growth https://t.co/yYha3Q93ND

WTI oil has joined Brent in trading above $100 a barrel. #economy #oil #energy #markets https://t.co/4dHt961DZo

Although monthly PPI (and, also, initial jobless claims) matched consensus forecasts, the immediate market reaction suggests markets were looking for a softer reading. The immediate reaction: the 10-year Treasury yield has climbed to 4.90% (CNBC chart below). #markets #economy #ppi #yields #inflation

The context for today's US Treausry sale of $22 billion of 30 year bonds. (Bloomberg chart.) #economy #markets #bonds #yields https://t.co/heu3Sxfw1W

Among the things to watch this morning in markets and the global economy: US PPI Inflation: The consensus forecasts are for a 0.4% monthly jump in headline PPI (lifting the annual inflation rate to 5.3%) and a 0.3% rise in core (4.6%). These readings will come ahead of tomorrow’s CPI inflation report. ECB Rate Decision: Beyond a widely anticipated 25 bps rate hike, all eyes will be on the accompanying remarks, particularly how European central bankers characterize the inflation dynamics and the appetite for further tightening. Meanwhile, markets are brushing aside the administration’s $5,000 “voter dividend” proposal, viewing actual implement…

Good morning. A rather familiar market dynamic this morning, with higher oil prices and rising yields. #economy #markets #oil #energy #bonds #yields https://t.co/UWhzwdvARK

Sacré bleu, as the French would say!! https://t.co/ECUEhnKKln

One thing is virtually certain when it comes to this Financial Times chart: Those bars are going higher. #economy #markets #debt @FT https://t.co/uyRWzqou2b

When it comes to the Federal Reserve, markets are understandably focused on whether the world's most powerful central bank hikes next week and, if it does, whether it is a "one and done" or the start of a cycle. Yet, for the reasons I have detailed in a prior column, the more consequential question for the economy and markets is the extent to which the new chair, Kevin Warsh, succeeds in reforming how the Fed operates and, in this context, minimizing the risk of repeating the policy slippages of recent years. In this regard, media outlets report more support internally for reducing the number of FOMC rate-setting meetings from eight to six an…

Staying with government bond yields, the US Treasury just paid 4.834% at issuance, the highest in almost twenty years (August 2007), despite strong demand at the auction. #economy #markets #bonds #yields

The initial market reaction to this Treasury announcement (CNBC reporting below) has been to push yields higher: The 10-year is currently trading at 4.845% (up 5 bps on the day), while the 30-year has reached 5.302% (up 6 bps). #economy #markets @CNBC #bonds #yields https://t.co/BvXiY70RY0

Oil grabs the spotlight, but the commodity price rally runs much deeper. The Bloomberg Commodity Index is now trading at levels not seen in over a decade, powered by moves like copper printing fresh record highs (charts below). #economy #markets #copper #Oil #commodities https://t.co/rNrnUlgcoE

"I am the house now:" The Treasury buyback and the Yen Today, the US Treasury is scheduled to announce the size of its expanded buyback program, designed to cool what Secretary Scott Bessent described as a “fever that was building” in the bond market. Ahead of the announcement, the Secretary dared traders to test his resolve on the Japanese yen—another front of recent market intervention—declaring, “I am the house now,” and pointing to the superior insights and information that he has compared to market participants. #economy #markets #bonds #debt #buyback #yen #intervention

Brent crude topping $100 is dominating headlines this morning, sharpening the focus on -- among a long list of things -- the economic, political, and social implications of high US gas (petrol) prices. And needless to say, yields are higher this morning. (Charts from CNBC and the AAA.) #economy #trade #oil #energy #markets

The link to this morning's conversation on CNBC's Squawk Box. Thank you, Andrew and Becky, for having me on the show. I enjoyed the conversation. https://t.co/UGb2fcnaEv #economy #markets @cnbc @andrewrsorkin @BeckyQuick @SquawkCNBC https://t.co/Ki2FsPIssB