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Stellar prices for gold have also stolen investor attention, with the precious metal scaling a new record of over $2,100. The record-breaking numbers for markets, however, haven't stopped some investors from worrying about three key issues. Inflation resurgenceAfter months of cooling, U.S inflation is proving itself to be more stubborn than experts had predicted. That's despite the Federal Reserve embarking on an aggressive monetary policy campaign over the past year, in a bid to tame consumer price pressures from their 40-year highs. Ariel Investments' Vice Chair Charlie Bobrinskoy told CNBC markets are not focused on China's residential real estate problems.
Persons: Michael M, haven't, Nobel, Paul Krugman, Mark Zandi's, Mark Zandi, Krugman, Nouriel Roubini, Doom, Trump, Marko Kolanovic, Mohamed El, Erian, Ariel, Charlie Bobrinskoy Organizations: New York Stock Exchange, Santiago, Federal, stoke, Allianz, Bloomberg, CNBC, El, Ariel Investments Locations: New York City, U.S, China
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailSupply-side issues make getting inflation to 2% 'really, really difficult', says Mohamed El-ErianMohamed El-Erian, Allianz chief economic advisor and president of Queens' College, Cambridge, joins 'Squawk Box' to discuss the state of the economy, the Fed's interest rate path outlook, latest market trends, and more.
Persons: Mohamed El, Erian Mohamed El Organizations: Erian, Allianz, Queens ' College , Cambridge
The Fed's over-dependence on data risks financial instability, Mohamed El-Erian wrote in a recent op-ed for Bloomberg. He says the central bank became too focused on inputs after misreading inflation in 2021. AdvertisementThe Federal Reserve's strict adherence to data is sapping it of policy alternatives, economist Mohamed El-Erian wrote for Bloomberg on Friday. Many central bank officials want to see a clear disinflationary trend in the data before cutting rates. He expects the Fed to keep rates unchanged through 2024, citing that neither inflation nor the US economy is sufficiently cooling.
Persons: Mohamed El, Erian, , Torsten Slok Organizations: Bloomberg, Service, Fed
At this point, only a disorderly financial adjustment or a central bank policy mistake could tip the balance, such as if the Fed hesitates to cut rates when the time comes. AdvertisementJanuary's inflation data did give the central bank reason to hold for longer, as Tuesday's report came in hotter than investors anticipated. Failure to come through with three cuts would also be a policy mistake. Generally, the US economy is suffering a "stock problem," as the market's rally been built on excessive Fed cut expectations. Instead, the CPI data provided a wake-up call for carried-away investors, El-Erian said, which explains Tuesday's market overreaction to the report.
Persons: , Mohamed El, Erian, they've, Dow Jones Organizations: Service, Federal, CNBC, Business, Queens ' College
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailHot CPI data was a 'wake-up call' to people who got carried away, says Mohamed El-ErianMohamed El-Erian, Allianz chief economic advisor and president of Queens' College, Cambridge, joins 'Squawk Box' to discuss the latest market trends, the hotter-than-expected CPI data, the impact on the Fed's rate path decision, and more.
Persons: Mohamed El, Erian Mohamed El Organizations: Erian, Allianz, Queens ' College , Cambridge
Chinese leader Xi Jinping said on New Year's Eve that the nation's economy had grown "more resilient and dynamic this year." Meanwhile, famed hedge fund manager and founder of Dallas-based Hayman Capital Kyle Bass said the country's heavily indebted property market has triggered a wave of defaults among public developers. That's a problem, given China's real estate market can account for as much as a fifth of the nation's GDP. "This is just like the U.S. financial crisis on steroids," Bass said, referring to China's default-ridden property market. The Institute of International Finance said Beijing has the policy capacity to push China's economy toward its growth potential and stuck to its above consensus forecast for 2024 growth at 5%, in a recent blog post.
Persons: Eswar Prasad, Mohamed El, Xi Jinping, there's, Paul Krugman, Krugman, Kristalina Georgieva, Hayman, Hayman Capital Kyle Bass, Bass, isn't Organizations: Future Publishing, CSI, China's National Bureau, Statistics, Allianz, International Monetary Fund, Nikkei, New York Times, Monetary Fund, Economic, IMF, Dallas, Hayman Capital, of International Finance Locations: Jiangsu, China, Nikkei Asia, U.S, Europe, tatters, Davos, Beijing
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailThe Fed isn't going to cut rates as aggressively as the market thinks, says Mohamed El-ErianMohamed El-Erian, Allianz chief economic advisor and president of Queens' College, Cambridge, joins 'Squawk Box' to preview the Fed's two-day policy meeting this week, rate path outlook, latest market trends, and more.
Persons: Mohamed El, Erian Mohamed El Organizations: Erian, Allianz, Queens ' College , Cambridge
download the appSign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. In today's big story, we're looking at why this is such a big week for the stock market . The big storyA week to rememberThree trends in the stock market are bound to vault equities higher in 2024, Wall Street strategists say. Getty ImagesWe're less than a month into 2024, but this week could determine the market's trajectory for the rest of the year. Tim Cook AppleThe information overload comes amid an uncertain time for Big Tech and the broader stock market.
Persons: , Netflix's, it's, Matthew Fox, Jerome Powell's, Tim Cook, Tesla, haven't, we'll, Fundstrat's Tom Lee, Read, Jamie Dimon, Larry Downing, Jennifer Piepszak, Marianne Lake, Troy Rohrbaugh, Jeffrey Gundlach, Buckle, Mohamed El, isn't, Erian, Lyra, Maven, Tyler Le, Liquidators, Max Organizations: Service, Business, Wall, Big Tech, Microsoft, Fed, Apple, Nvidia, Meta, Google, optimist, JPMorgan, DoubleLine, Prime, Comcast, Warner Bros, Lyra Health, Hong, Alaska Airlines Locations: India, Japan, Hong Kong, China, Alaska
The narrative that the US economy could achieve a soft landing still faces challenges, Mohamed El-Erian told Bloomberg TV. download the app Email address Sign up By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . AdvertisementMarket confidence in a US soft landing ignores three vulnerabilities that still pose a recessionary threat, economist Mohamed El-Erian told Bloomberg TV. The bank expects a noticeable mid-year slowdown, contrasting Wall Street's soft landing consensus. Secondly, inflation will also keep a recession on standby, as it's no given that it won't rebound, El-Erian warned.
Persons: Mohamed El, Erian, , it's, Wells, November's, I've, Yemen's Houthi Organizations: Bloomberg, Service, Federal Reserve Locations: Europe, Red, Africa
Inflation measures how fast prices are rising for goods and services — anything from concert tickets and haircuts to groceries and furniture. That means further broad disinflation likely won't come from consumer goods, economists said. In fact, attacks by Houthi rebels on ships in the Red Sea threaten to disrupt a key transit corridor and may trigger higher goods inflation if it persists, El-Erian explained. While down from more than 7% last year, services inflation still sits at 5.3%. Why this may all be 'nonsense'Not all economists think the last mile of disinflation will be harder than what came before, however.
Persons: Robyn Beck, Mohamed El, We're, Gargi Chaudhuri, Houthi, Erian, Chaudhuri, Mark Zandi, Sarah House, Paul Ashworth Organizations: Afp, Getty, Allianz, Queens ' College, University of Cambridge, CNBC, Americas, BlackRock, Finance, of Labor Statistics, Labor, Moody's Analytics, Wells, Wells Fargo Economics, Capital Economics Locations: Los Angeles, U.S, Wells Fargo
Inflation looks to be stuck above the Fed's target rate, top economist Mohamed El-Erian said. If the Fed lowers inflation to 2% too quickly, it risks "crushing" the economy, El-Erian has warned. AdvertisementThe Federal Reserve's inflation fight has hit a wall, and central bankers can't lower prices in the economy any further without causing damage, according to top economist Mohamed El-Erian. El-Erian warned last year that inflation would likely get stuck around the 3%-4% mark, thanks to persistent pressures in the economy that will push prices higher, he said. Other commentators on Wall Street have warned of the possibility of resurgent inflation as price pressures in the economy linger.
Persons: Mohamed El, Erian, Organizations: Service, Allianz, Bureau of Labor Statistics, Bloomberg, CPI, stoke, El, New York Fed, Cleveland Fed Locations: El, That's, Red
The Fed has a "loaded gun" it can use if the Goldilocks economy worsens, Apollo Asset Management's co-president said. That's as the central back has kept rates high, giving policymakers room to lower them. "I would argue that the Fed put is back, sort of, on the market right now," James Zelter told Bloomberg TV. AdvertisementZelter noted the Fed has maintained "fairly high rates," which currently stand at 5.25%-5.5% — the highest since 2001 . Those Goldilocks conditions have helped stocks rocket upwards, as markets bet on the end of the Fed's rate hikes.
Persons: That's, James Zelter, , Zelter, Mohamed El Organizations: Fed, Bloomberg, Service, Apollo Asset Management
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailMy hope is the Fed targets a 3% inflation instead of 2%, says Mohamed El-ErianMohamed El-Erian, Allianz chief economic advisor and president of Queens' College, Cambridge, joins 'Squawk Box' to discuss the latest market trends, the Fed's inflation fight, the state of the economy, and more.
Persons: Mohamed El, Erian Mohamed El Organizations: Fed, Erian, Allianz, Queens ' College , Cambridge
Markets are overly optimistic about the economy next year, Mohamed El-Erian said in a CNBC interview. Meanwhile, November's rally was driven by Goldilocks data, lower yields, and lower oil prices. According to the top economist, markets are overly optimistic about the economy next year. And thirdly, I don't think OPEC is going to stay quiet to see oil prices where they are now." AdvertisementAnd finally, falling oil prices may not sit well with OPEC+ countries, like Saudi Arabia and Russia, who have been slashing production to prop up oil prices.
Persons: Mohamed El, Erian, , they've, I'm, Treasurys, there's Organizations: CNBC, Service, Federal, West Texas Locations: Saudi Arabia, Russia
Several investors mourned the passing of famed investor Charlie Munger, vice chairman of Warren Buffett's Berkshire Hathaway , on Tuesday. "So sad to hear the news of the passing of Charlie Munger," El-Erian wrote. Mario Gabelli, chairman and CEO of Connecticut-based GAMCO Investors, wrote on Twitter: "Charlie Munger ….a titan has passed …all will miss Charlie." "Charlie Munger helped build an American institution, and through his wisdom and insights, inspired a generation of leaders. "Charlie Munger was a brilliant attorney," Annandale Capital chairman George Seay said Tuesday evening on Yahoo Finance.
Persons: Charlie Munger, Warren Buffett's Berkshire Hathaway, Berkshire Hathaway, Buffett, Munger, Ariel Investments, Charles Bobrinskoy, Mohamed El, PIMCO, Erian, Mario Gabelli, Charlie Munger …, Charlie, Tim Cook, Cook, Stephanie Link, Hightower, Whitney Tilson, Tilson, George Seay, Wesley Chan, Chan, , Christina Cheddar Berk, Brian Evans, Alex Harring Organizations: Warren, Allianz, Twitter, Apple, Berkshire, Hightower Advisors, Berkshire Hathaway, CNBC, Yahoo Finance, Daily, Costco Locations: Munger, Connecticut, Berkshire, American, California, Annandale, FPV
New York CNN —Billionaire investor Charlie Munger, the long-time friend and business partner of Warren Buffett, has died. Berkshire Hathaway, the investment firm where Munger served as vice chairman, said in a press release that Munger passed “peacefully” on Tuesday morning in a California hospital. Charles Thomas Munger, known by his nickname, “Charlie,” was born on January 1, 1924, in Omaha, Nebraska. Buffett told CNBC in 2021 that after their first meeting, he knew “I’m not going to find another guy like this …. “If people weren’t so often wrong, we wouldn’t be so rich,” Munger said during a 2015 Berkshire Hathaway annual shareholders meeting.
Persons: Charlie Munger, Warren Buffett, Berkshire Hathaway, Munger, Charles Thomas Munger, “ Charlie, , Wall, Munger’s, “ Berkshire Hathaway, Charlie, Mohamed El, ” Whitney Tilson, Buffett, , ” Munger, “ I’m, CNN Munger, — CNN’s Nicole Goodkind Organizations: New, New York CNN, Berkshire, US Army, University of Michigan, Harvard Law School, Berkshire Hathaway, Erian, Allianz, CNN, Forbes, CNBC, Xerox, Daily Journal Locations: New York, , , California, Omaha , Nebraska, Southern California, Japan, Omaha, Berkshire, Munger, Los Angeles
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailUpside surprise has led people to be overly optimistic about next year, says Mohamed El-ErianMohamed El-Erian, Allianz chief economic advisor and president of Queens' College, Cambridge, joins 'Squawk Box' to discuss the latest market trends, the Fed's inflation fight, economic outlook, and more.
Persons: Mohamed El, Erian Mohamed El Organizations: Erian, Allianz, Queens ' College , Cambridge
Ten-year Treasury yields hit a 16-year high of 5.021% in late October, but have fallen back to 4.414%. Some big investors and advisers believe, however, that reasons to cheer are short-lived and growing concerns over the economy will start weighting on asset prices early next year. His focus now is more on earnings, credit markets and broader economic data for signs of a potential slowdown. The U.S. presidential race next year is also a concern because it could be a source of more market instability. For a new boost in market performance, tech stocks will depend more on showing how AI can lift results, investors said.
Persons: We've, Ryan Israel, Bill Ackman's, Mohamed El, Peter van Dooijeweert, Max Gokhman, Franklin Templeton, Bill Gross, van Dooijeweert, Carolina Mandl, David Randall, Svea, Bayliss, Megan Davies, Leslie Adler Organizations: Nasdaq, Bill Ackman's Pershing, Capital Management, Allianz, Group's Solutions, U.S, Reuters, Microsoft, Wall, Svea Herbst, Thomson Locations: extrapolating, U.S, China
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailWhat's priced in for rate cuts next year 'is probably too aggressive', says Mohamed El-ErianMohamed El-Erian, Allianz chief economic advisor and president of Queens' College, Cambridge, joins 'Squawk Box' to discuss the latest market trends, why he believes the 'narrative ping pong' about the type of economic landing market analysts are expecting is far from over, the Fed's inflation fight, and more.
Persons: Mohamed El, Erian Mohamed El Organizations: Erian, Allianz, Queens ' College , Cambridge
The Fed's next rate move will be to cut rates, former PIMCO chief economist Paul McCulley said. Some forecasters say the Fed will slash interest rates by nearly three percentage points next year. Most significant is the "crack" in shelter inflation, McCulley said, which rose 6.7% year-over-year in October. AdvertisementInvestors will debate over when the Fed will cut rates, he added, though most are expecting the first rate cut to happen sometime next year. Some economists, though, have cautioned that the Fed risks easing interest rates prematurely, which could eventually lead to a resurgence in inflation down the line.
Persons: Paul McCulley, McCulley, , That's, we've, Mohamed El Organizations: Service, CNBC, UBS, Fed
Financial markets have been engaged in a growing debate over the risks that lurk in Treasurys, with prominent voices raising doubts. AdvertisementAdvertisementIn March, a Richard Bernstein Advisors note said spreads on credit default swaps have climbed for Treasurys since since 2011, when the federal government was issued its first credit downgrade. Then came this spring's debt-ceiling drama and the US credit downgrade in August from Fitch, which cited the rising debt burden and political dysfunction. If a downgrade follows, then US debt wouldn't be in the safest category for default risk at any of the three major ratings agencies. Several auctions for long-dated Treasurys have seen weak demand, and buyers are demanding higher compensation for the risk of carrying Treasurys.
Persons: , Moody's, they've, Mohamed El, Erian, Asset's Seema Shah, Treasurys, Richard Bernstein, Gennadiy Goldberg isn't Organizations: Service, Federal, CNBC, Dallas Federal, Richard Bernstein Advisors, Fitch, Penn Wharton Budget, Securities Locations: Treasurys, there's, US
Inflation will drop sharply, but prices won't get back to the Fed's 2% target soon, Mohamed El-Erian said. AdvertisementAdvertisementThe economy will soon see a sharp drop in inflation – but that still won't be enough to return it to the central bank's target, according to top economist Mohamed El-Erian. Headline inflation accelerated 3.7% year-per-year in September, slightly above the expected 3.6% clip. Meanwhile, core inflation accelerated 4.1% year-per-year, in-line with economists' forecasts. Headline inflation is expected to accelerate 3.28% year-per-year, while core inflation is expected to remain mostly level at 4.16%, according to the Cleveland Fed's Inflation Nowcast.
Persons: Mohamed El, Erian, , Goldman Sachs, Neel Kashkari, Powell Organizations: Bloomberg, Service, Allianz, Federal, Minneapolis, of Labor Statistics, Cleveland
CNN —Manchester United’s nightmare season continued on Wednesday night after it was stunned in the Champions League by Copenhagen in a seven-goal thriller. So I can’t make any criticism on the team for that.”Ten Hag looks on during the Champions League game against Copenhagen. James Gill - Danehouse/Getty ImagesAfter an adversity-filled few weeks, Wednesday looked like it might have been the rebirth of Manchester United under the Dutchman. Copenhagen players celebrate after beating Manchester United. Maja Hitij/Getty ImagesBardghji became the youngest player to score a Champions League goal against Manchester United, aged 17 years and 358 days.
Persons: Rasmus Højlund, Marcus Rashford, Erik ten, , James Gill, Højlund’s, Copenhagen’s Elias Jelert, Rashford, Donatas Rumšas, Paul Scholes, Owen Hargreaves, Maja Hitij, I’m, Mohamed Elyounoussi, Diogo Gonçalves, United, Harry Maguire’s, Bruno Fernandes, Lukas Lerager, Bardghji, Fernandes, , it’s Organizations: CNN, Manchester, Champions League, Copenhagen, Galatasaray, Bayern Munich, Premier League, Manchester City, Devils, League, Newcastle United, Manchester United, England, United, TNT Sports, Leicester, Luton Locations: Copenhagen, Brighton, Crystal, Portuguese
"The red card changes everything," a beleaguered Ten Hag told TNT Sports. "We controlled the game until the red card. The night marked the first Champions League loss for United in which they led by two or more goals. It was their first defeat after taking a two-goal lead in all competitions since a 5-3 loss to Leicester City in September 2014. The defeat spoiled a feel-good return to Copenhagen for Hojlund, who was born in the Danish capital and whose younger brothers Emil and Oscar both play for Copenhagen.
Persons: Marcus Rashford, Rasmus Hojlund, Erik, Hojlund, Scott McTominay's, Kamil Grabara, Rashford, Elias Jelert, Mohamed Elyounoussi, Harry Maguire's, Diogo Goncalves, Andre Onana, Bruno Fernandes, Lukas Lerager, Rasmus Falk's, Roony Bardghji, Emil, Oscar, Lori Ewing, Toby Davis Organizations: COPENHAGEN, Manchester United, League, FC Copenhagen, United, Hag, TNT Sports, Galatasaray, Bayern Munich, Copenhagen, of, Champions League, Man City, Leicester City, Thomson Locations: Copenhagen, Hojlund
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailWe cannot have a Fed that is reacting to yesterday's data all the time, says Mohamed El-ErianMohamed El-Erian, Allianz chief economic advisor and president of Queens' College, Cambridge, joins 'Squawk Box' to discuss the Fed's inflation fight, why he believes the four most important central banks effectively called a 'time out' on policy action over the last two weeks and should use the strategy wisely, economic outlook, and more.
Persons: Mohamed El, Erian Mohamed El Organizations: Erian, Allianz, Queens ' College , Cambridge
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