Mohamed El-Erian

Here’s the link to FSB (Financial Stability Board) Chair Andrew Bailey’s letter to the G-20 warning that “markets remain vulnerable to a potentially disorderly correction that could spread across borders, particularly given fragilities in sovereign debt markets, vulnerabilities in private credit, as well as stretched asset valuations.” Think of it as another illustration of the inherent promise/peril innovation equation: what makes the considerable upside possible (and needs to be unleashed) comes with downside risks (that need to be identified and mitigated). https://t.co/wuTmmYjxeH #economy #markets #ai #innovation

Oil prices opened the week over 2% higher in Asia-Pacific trading (CNBC table below) following reports of US military strikes in Iran. This comes as US regular gasoline remains stuck above $4 a gallon and diesel hovers near its all-time high (AAA data below). #oil #energy #economy #markets @CNBC @AAA_Travel

From US policy announcements to Japan’s record $96bn monthly FX intervention, markets continue to navigate the tug-of-war between macro policy and corporate earnings. Here's my weekly review and a look ahead (please use either link). https://t.co/WYUH8M1EvR https://t.co/GgjKRfUnMa #economy #markets

Posted earlier today: From the Financial Times: My take on what to make of Federal Reserve Chair Kevin Warsh's first Jackson Hole speech. https://t.co/bYOU6EbX9n #economy #markets #FederalReserve #ArtificialIntelligence #inflation @ft

Thank you very much, Mario, for the conversation and for for having me on your show. #economy #markets @MarioNawfal

Just posted by the Financial Times: My take on what to make of Federal Reserve Chair Kevin Warsh's first Jackson Hole speech. https://t.co/fr23UzNzpY #economy #markets #federalreserve #ai #inflation @ft

Good morning. This Wall Street Journal article looks at the "how" and "so what" of China’s multi-year strategy—managing oil imports, strategic stockpiles, and energy substitution—which has established it as "the most powerful swing buyer in global energy markets." https://t.co/xZ4GiBcuIq #economy #china #markets #oil #energy

A clip from this afternoon's conversation on Closing Bell with Contessa Brewer. Thank you, Contessa. https://t.co/AEMvRCTdDX #economy #markets @CNBC https://t.co/By9CNXzxWY

US Treasury curve move sends 2 messages Today’s 2s-10s (~7 bps) and 2s-30s (~10 bps) yield curve flattening (Bloomberg charts below) would suggest a double message from fixed income markets: Short-term hawkish repricing following Chair Warsh’s firm commitment to the inflation target. An endorsement of longer-term Fed credibility. #economy #markets #federalreserve

The market-implied probability of a September Fed rate hike has jumped to nearly 60%, while Kalshi currently prices it at 49%. Both seem too high for three reasons: Market-based measures of inflation expectations remain well anchored. AI-driven productivity gains give reasons to be more optimistic about the future evolution of the supply side, while AI demand-side worries are likely to abate. Fed rate hikes will hit most already struggling, interest-rate-sensitive sectors such as housing. #economy #markets #federalreserve #inflation

Two Yen-related updates: 1. The yen has weakened to 160 per US dollar again, which is bound to fuel intervention speculation (CNBC chart below). 2. In a letter to Senator Elizabeth Warren, US Treasury Secretary Scott Bessent stated that “Japan is a major holder of U.S. Treasuries…. Disorderly yen markets can trigger forced unwinds, which could destabilize global markets and ultimately raise borrowing costs for American families and businesses.” #economy #japan #markets #yen #fx

This is a clear and powerful speech that, in my opinion, meets the high expectations for Kevin Warsh’s first Jackson Hole presentation as Federal Reserve Chair; and this notwithstanding the unusually wide range of expectations leading up to it. His remarks address directly and effectively the loud calls from some market participants and economists for his views on the current state of the economy, the balance of risks to the Fed’s dual mandate, and his commitment to the inflation target. These are the issues that will most likely dominate media headlines. Crucially, however, Chair Warsh also details why the practice of forward guidance has "o…

It’s Jackson Hole time! As he prepares to deliver his first keynote address as Federal Reserve Chair, Kevin Warsh faces a delicate balancing act: how to navigate a remarkably high and varied set of expectations. On one side are those who want him to follow his predecessors’ tradition of detailing his immediate "reaction function" alongside forward guidance. On the other are those who hope he returns to the original secular spirit of this unique gathering. This would mean focusing on a growing, complex set of domestic and policy issues at a time of deep structural transformation driven by both technological innovation and geo-economics. It is …

Good morning. Record currency intervention by Japan: According to Bloomberg reporting, the Japanese Ministry of Finance spent $96 billion in the month ending August 26 to support the yen—a record one-month level augmented by the rare joint and coordinated action with the US on July 31. After strengthening to nearly 156 per dollar immediately following the joint intervention (chart below), the yen has weakened back toward 160, a level widely viewed as a possible trigger line for further intervention. Meanwhile, the big question remains when/if Japan will deploy a more comprehensive policy response involving the Ministry, the Bank of Japan, and…

FYI, a quick economic data update: Weekly jobless claims continue to signal a resilient U.S. labor market. Specifically, initial filings dropped to 203,000, slightly beating consensus expectations (208,000) and down from the previous week (207,000). #economy #matkets #jobs

Please see below from CNBC for the latest on the US mortgage market. It is interesting to see how mortgage costs are evolving beyond their traditional role as a key housing market indicator. In the current climate, mortgage rates are taking on broader political and social dimensions. This is part of a larger phenomenon whereby markets and economic policy are increasingly influenced by domestic politics, geopolitics, and national security—particularly IF corporate earnings growth were to slow. #economy #markwts #housing #mortgages @cnbc

The Federal Reserve’s preferred inflation gauge came in as expected this morning: Monthly core PCE inflation for July was 0.2%, and annual was 3.3%, both matching consensus forecasts. Headline ticked up to 0.2% monthly (-0.1% prior and 0.1% expected), leaving the annual figure unchanged at 3.7%. None of this changed market expectations for a September Fed rate hike, which, at around 40%, still feels too high to me. Elsewhere in this morning's data, flat consumer spending reinforces the recent stretch of softer-than-expected economic activity indicators. #economy #markets #federalreserve #inflation

Staying on economic data, two misses in US economic activity numbers today: July new home sales fell as elevated mortgage rates weighed on demand, an issue that has been gaining significant economic and political traction. Meanwhile, Conference Board Consumer Confidence missed consensus, dropping to 89.2 and raising the stakes for the upcoming UMich survey. #economy #markets #growth #housing #confidence

Better economic news out of Germany today: Per the Bloomberg charts below, the upwardly revised Q2 GDP extends a nine-month streak of firmer growth, complemented by an IFO business confidence survey for August that rose more than expected. #economy #markets #germany #growth https://t.co/sw7bANkFqi

This Wall Street Journal chart illustrates the eye-popping volatility in South Korean stocks. Specifically, KOSPI realized vol spiked to around 100, sharply decoupling from the S&P 500's relatively contained levels. @wsj #economy #markets #stocks #korea #kospi #volatility https://t.co/OkqwaVexY9

Good morning. Key developments attracting attention this early NY morning include: Oil prices down another 3%, easing upward pressure on global government bond yields, including a 3 bps decline in the US 10-year (CNBC charts below); Stan Druckenmiller’s critical WSJ op-ed on US Treasury intervention in the bond market (excerpts below of the most quoted paragraphs); and China’s counter-threat following yesterday’s US warning of secondary sanctions on those facilitating Iranian trade and financial flows (FT report below). #economy #markets @cnbc @wsj @ft #bonds #yields #sanctions #oil #yields

On government bond market intervention, Secretary Bessent didn't offer additional information, including on the TGA (this morning's CNBC reporting based on a "senior official"). He noted the government hasn't bought a single extra bond yet. He hinted that September 9 would be a day to assess last week's signal for bigger buybacks. #economy #markets #bonds #yields

Secretary Bessent’s remarks just now made it clear that secondary sanctions are central to intensifying US economic pressure on Iran, with "no one above the reach of US sanctions." When reporters pressed on whether China and its entities would be targeted, they were told to wait and see. He noted that the US, using "quiet diplomacy," is making clear to other countries what is expected. He added that he doesn't want to "blow up" the financial system, including asking some "to leave the dollar system," before giving those operating in the "gray areas" time to change. #economy #markets #economicfury #china

First day of classes for the new academic year! So looking forward to meeting the students in my Wharton MBA class on Geo-economics, and to our conversations. #Wharton #GeoEconomics #HigherEd #AcademicYear #FirstDayOfClass @Wharton @Penn #penn https://t.co/hZSIKU4qNG

FYI, here is the link to this morning's conversation on Squawk Box. Thank you again, Andrew, Becky, and Joe. https://t.co/xO1qagksEc #economy #markets #cnbc @CNBC

Thank you for having me on the show, Andrew, Becky and Joe. @CNBC @SquawkCNBC @JoeSquawk @BeckyQuick @andrewrsorkin #economy #markets https://t.co/9ic4HNSfxh

Here are two reasons why I am less than comfortable with the US Treasury being drawn deeper into price determination in the government bond market: First, the track record of such intervention is shaky once you move beyond addressing market malfunction and/or preventing major institutional shocks—neither of which seems to be the case today. Second, it's usually not healthy when markets consistently dictate extraordinary official interventions rather than the other way around—which is a risk here. #economy #markets #bonds

Per the CNBC charts below, the price rally in crypto and gold continues this morning with bitcoin above $78,000 and gold above $4,700. #economy #markets #crypto #bitcoin #gold @cnbc https://t.co/Gea25boWor

Good morning. In the run-up to Friday’s Jackson Hole remarks by Chair Warsh, we are likely to hear several market commentators state that bond markets are "testing" the Federal Reserve by pushing longer-term yields higher. Yet the specific market indicators that would support that narrative don't align. If markets are testing anyone—and I am skeptical of that formulation—they are testing the federal budget's capacity to make room for the significant uptake in the financing demand of a tech sector poised to transform productivity and enhance growth and prosperity. Rather than framing this as who is testing whom, a more accurate view is that ma…

From US debt crossing the $40 trillion mark to tariffs and fluctuating bond yields, this past week defied the usual August market lull. My latest weekly note (accessed through one of the two links below) reviews these developments and previews a pivotal week ahead featuring Jackson Hole, PCE inflation, Nvidia's earnings, and the possibility of further yield-related Treasury announcements. https://t.co/pbINk0fyrS https://t.co/j6VojqImon #economy #markets