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☆ Inflation will be sticky around 4-5%: Mohamed El-Erian
▼ + stars: | 2023-04-17 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailInflation will be sticky around 4-5%: Mohamed El-ErianMohamed El-Erian, Allianz and Gramercy advisor and president of Queens' College, Cambridge, joins 'Squawk Box' to discuss the higher yields, how sticky inflation will be, and more.

☆ There's no reason for the US to fall into recession unless the Fed messes up, Mohamed El-Erian says
▼ + stars: | 2023-04-11 | by ( Zahra Tayeb | ) www.businessinsider.com time to read: +6 min

Mohamed El-Erian said the US economy can avoid a recession unless the Fed makes another policy error. "There's no reason why we should fall into a recession other than getting another Fed policy mistake," he said. REUTERS/Jason ReedMohamed El-Erian says there's no reason for the US to tip into recession unless the Federal Reserve miscalculates what it needs to do again. "There's no reason why we should fall into a recession other than getting another Fed policy mistake," he said. Those tighter credit conditions — a credit crunch — could end up dragging on economic growth alongside Fed rate hikes.

☆ The resilient job market is finally showing signs of cooling off
▼ + stars: | 2023-04-10 | by ( Phil Rosen | ) www.businessinsider.com time to read: +4 min

The job market is clearly starting to slow down. Mohamed El-Erian said March's jobs report was a win-win for both the stock market and the Fed. "We are making this transition where the stock market was obsessed with interest-rate risk to one that is concerned about credit risk." What's your take on the latest job data? In other news:Traders works on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S., March 5, 2020.

☆ I think we can avoid a recession, says Allianz advisor Mohamed El-Erian
▼ + stars: | 2023-04-10 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailI think we can avoid a recession, says Allianz advisor Mohamed El-ErianMohamed El-Erian, Allianz advisor and president of Queens’ College, Cambridge, joins ‘Squawk Box’ to discuss the markets, the Fed, and why the U.S. economy can avoid a recession.

☆ The March jobs report was a win-win for stocks and the Fed, economist Mohamed El-Erian says
▼ + stars: | 2023-04-07 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

The March jobs report is a win for stocks and the Fed should keep a steady pace of rate hikes in May, Mohamed El-Erian said. Stock futures closed higher after the jobs report that arrived during the Good Friday holiday. "It's good to see good economic news," El-Erian, chief economic adviser at Allianz, said on Bloomberg TV after the Labor Department released its report. US stock futures turned higher after the Labor Department released its data. Trading in stock futures was open until 9:15 a.m. Eastern time on Friday, while broader equity trading was closed for the Good Friday holiday.

☆ Powell's Fed may be remembered not for conquering inflation but for undermining its own credibility, Mohamed El-Erian says
▼ + stars: | 2023-04-06 | by ( Zahra Tayeb | ) www.businessinsider.com time to read: +2 min

Mohamed El-Erian has slammed Powell's Fed again, saying it'll be remembered more for the bad than the good. The central bank will likely be remembered more for damaging its own credibility than for taming inflation, he said. El-Erian has been an ardent critic of the Fed in their approach toward tackling high US inflation. Sign up for our newsletter to get the inside scoop on what traders are talking about — delivered daily to your inbox. El-Erian has repeatedly criticized Powell's Fed, blaming them for a string of failures over the past couple of years in tackling high US inflation.

☆ The Fed should keep raising rates as overblown credit fears make a recession unlikely, Fed President Bullard says
▼ + stars: | 2023-04-06 | by ( Filip De Mott | ) www.businessinsider.com time to read: +3 min

The Fed can keep raising rates as there's little risk of recession caused by recent bank stress, Fed president James Bullard said. The lending facilities extended to banks have been working, offsetting a bigger credit crunch. "It's not clear to me that there will be much of a pullback on lending by these types of banks," Bullard said. Bullard had previously forecast a Fed rate of 5.50%-5.75%, and has been a proponent of the bank's aggressive policy in order to tame high prices. And rate cuts may not be the most effective answer to current credit anxieties, Bank of America explained in a note published Thursday.

☆ The banking crisis will have 'a long tail' as risks move to economic from financial contagion, Mohamed El-Erian says
▼ + stars: | 2023-03-31 | by ( Filip De Mott | ) www.businessinsider.com time to read: +2 min

Risks have shifted from financial to economic contagion, Mohamed El-Erian said. The lending crunch caused by the bank crisis will drag on, the top economist told Bloomberg TV. "This will play out probably in the third and fourth quarter and it will have a long tail." This will play out probably in the third and fourth quarter and it will have a long tail." Even prior to the collapse of the Silicon Valley Bank, financial institutions were beginning to tighten their lending standards as the Federal Reserve aggressively hiked interest rates to nearly 5% in a year's time.

☆ SVB saw $142 billion fly out the door in just 2 days in a tech-driven bank run - and that spells trouble, says Mohamed El-Erian
▼ + stars: | 2023-03-29 | by ( Zinya Salfiti | ) www.businessinsider.com time to read: +2 min

SVB saw $142 billion pulled from deposits in just two days before it collapsed. The bank run was sped up by social media spreading news faster and tech tools making it easier to withdraw funds. Mohamed El-Erian said potential high-speed bank runs raise challenges for banks. These new details of SVB's downfall has top economist El-Erian flagging warning signs of the impact of tech tools on banks. "I anticipate the need to strengthen capital and liquidity standards for firms over $100 billion," Barr said.

☆ A 'trilemma' of problems has cornered the Fed again — but this time there's no good way out, Mohamed El-Erian says
▼ + stars: | 2023-03-28 | by ( Zinya Salfiti | ) www.businessinsider.com time to read: +4 min

The Federal Reserve is once again having to resolve a complex set of problems, according to Mohamed El-Erian. But there's no "first best policy response" the Fed can take amid the banking turmoil, he said. "That is the most important question right now — the degree of economic contagion resulting from this mishandled interest rate cycle." Customers have pulled around $1 trillion in deposits from smaller banks since the Fed started raising rates, according to JPMorgan. The economist said he believes the Fed can sort out the interest rate mismatches that have squeezed companies.

☆ There's more economic pain coming as the SVB fallout is likely not contained, Mohamed El-Erian says
▼ + stars: | 2023-03-28 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

More economic pain is coming as the SVB fallout is likely not contained, Mohamed El-Erian said. Though policymakers have quelled financial contagion, economic contagion is still a risk, he warned. Other market commentators have also warned of more economic pain, as the outflow of deposits in recent weeks will make banks less willing to lend, leading to tighter credit conditions. It is also a reminder to markets not to allow the understandable focus on supersonic-speed financial contagion divert all the attention away from slower-moving economic contagion," El-Erian warned. Though El-Erian has said a recession isn't inevitable, other commentators have warned that a downturn is more likely.

☆ The Fed's rate hike policy doesn't have many fans — but abandoning the inflation target would be a 'disaster' that brings the economy back to the 1970s, a Fed official says
▼ + stars: | 2023-03-27 | by ( Huileng Tan | ) www.businessinsider.com time to read: +5 min

The president of the St. Louis Fed said it would be a disaster for the Fed to abandon its inflation target. The Fed has been hiking interest rates aggressively to get inflation down to 2%. The Fed then targeted inflation aggressively and adopted the 2% inflation target in the 1990s. Ethan Harris, a Bank of America economist, wrote in a December note there's little evidence that the 2% inflation target is the "optimal target," per Fortune. Higher interest rates make borrowing — like mortgages to credit cards more expensive.

☆ The Fed should pause rate hikes and make sure financial contagion is behind us: Mohamed El-Erian
▼ + stars: | 2023-03-27 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailThe Fed should pause rate hikes and make sure financial contagion is behind us: Mohamed El-ErianMohamed El-Erian, Allianz and Gramercy advisor and president of Queens' College, Cambridge, joins 'Squawk Box' to discuss the Fed's next steps, how much banks will reel in their lending, and more.

☆ Premarket stocks: The banking meltdown may have done the Fed's work for it
▼ + stars: | 2023-03-22 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +7 min

But in a strange twist, it’s possible that the banking meltdown actually did some work for the Fed in bringing down prices without raising interest rates. That could have the equivalent effect of the Fed hiking rates by half a point, said Goldman Sachs economists on Tuesday. Bank stocks rebound as Janet Yellen, Jamie Dimon work to restore confidenceThe collapse of Silicon Valley Bank and Signature Bank rippled through markets last week. The Treasury secretary reiterated that the federal government would be willing to rescue uninsured depositors at small banks if lenders suffer bank runs, raising the specter of contagion. The SPDR Regional Banking Equity Traded Fund, which tracks a number of small and mid-sized bank stocks, gained 5.8% for the day.

☆ Interest rate decision: What to expect from the Fed meeting
▼ + stars: | 2023-03-22 | by ( Christine Romans | ) edition.cnn.com time to read: +5 min

Among the choices, the Fed could continue its aggressive rate-hike campaign to cool inflation that is running at triple the central bank’s target of 2%. Warren — already a critic of the Fed’s inflation fight — leveled further blistering criticism of the Republican Fed chief. In addition to achieving price stability and financial stability, the Fed’s broader mandate includes supervision of individual financial institutions, Leer says, and “that’s where the failure lies. “The Fed needs to secure both price stability and financial stability, something that it has failed to so recently,” he told CNN. And this Fed chief inherited an unprecedented economy.

☆ The Swiss government has put a stop to some Credit Suisse banker bonuses after public backlash over the state-engineered rescue plan
▼ + stars: | 2023-03-22 | by ( Huileng Tan | ) www.businessinsider.com time to read: +3 min

Switzerland is halting some Credit Suisse banker bonuses. It's a U-turn from before when CS had told staff they would still receive bonuses — even for 2023. The Swiss federal finance ministry said in a statement on Tuesday that it's "temporarily suspending certain forms of variable remuneration for Credit Suisse employees. The Swiss government has been careful about its messaging about the rescue of Credit Suisse, which involves an around $3.25 billion acquisition by UBS, a larger lender. Credit Suisse did not immediately respond to Insider's request for comment sent outside regular business hours.

In a package engineered by Swiss regulators on Sunday, UBS Group AG (UBSG.S) will pay 3 billion Swiss francs ($3.2 billion) for 167-year-old Credit Suisse Group AG <CSGN.S>, which was once worth more than $90 billion. European bank shares inched into positive territory (.SX7P) while shares in U.S. financial giants Citigroup (C.N) and JPMorgan Chase (JPM.N) rose 1.2% and 0.7% respectively. Investor focus had shifted to the massive blow some Credit Suisse bondholders will take, a new worry in a rolling banking sector crisis sparked by the collapse of midsize-U.S. lenders Silicon Valley Bank (SVB) and Signature Bank (SBNY.O) earlier this month. [1/2] Buildings of Swiss banks UBS and Credit Suisse are seen on the Paradeplatz in Zurich, Switzerland March 20, 2023. QUESTIONS FOR UBSThe deal to buy Credit Suisse will make UBS Switzerland’s only global bank and the Swiss economy more dependent on a single lender.

In a package engineered by Swiss regulators on Sunday, UBS will pay 3 billion Swiss francs ($3.23 billion) for 167-year-old Credit Suisse Group AG (CSGN.S) and assume up to $5.4 billion in losses. Investor focus has now shifted to the massive blow some Credit Suisse bondholders will take, adding to anxiety about other banking sector risks including contagion and the fragile state of U.S. regional lenders. UBS acquiring Credit Suisse for 3 billion francs a week ago would have seemed like a terrific deal. Buildings of Swiss banks UBS and Credit Suisse are seen on the Paradeplatz in Zurich, Switzerland March 20, 2023. QUESTIONS FOR UBSThe deal to buy Credit Suisse will make UBS Switzerland’s only global bank and the Swiss economy more dependent on a single lender.

☆ UBS acquiring Credit Suisse is 'no bailout' says Swiss finance minister — but top economist Mohamed El-Erian disagrees
▼ + stars: | 2023-03-20 | by ( Huileng Tan | ) www.businessinsider.com time to read: +3 min

Switzerland's finance minister said UBS' $3.25 billion acquisition of Credit Suisse is not a bailout. The UBS and Credit Suisse deal — worth 3 billion Swiss francs, or $3.25 billion — comes with government guarantees and liquidity provisions. In particular, the Swiss government is guaranteeing UBS will get up to 9 billion Swiss francs if they incur losses from certain assets. The Swiss National Bank is also providing 100 billion Swiss francs in liquidity support to both banks. "The bankruptcy of Credit Suisse would have had a huge collateral damage - on the Swiss financial market also internationally," she said.

LONDON, March 17 (Reuters) - Hedge funds are watching growing U.S.-Chinese geopolitical tensions and have spotted ways to trade them. Taking a short position on investment grade bonds would make up for losses on long positions elsewhere, he said. If tensions were resolved, being caught with a negative view on Chinese stocks would not be beneficial, and therefore she would not short Chinese AI firms but invest in U.S. ones instead. "The most sensitive commodity to a break down in trade between China and Russia and the West is graphite," he added. "Supply chains are already shifting to Penang, and they are receiving investment from both China and the U.S.

☆ Banks borrowed a record $153 billion from the Fed as SVB's collapse rocked Wall Street
▼ + stars: | 2023-03-17 | by ( Zahra Tayeb | ) www.businessinsider.com time to read: +2 min

Banks rushed to borrow unprecedented amounts from the Federal Reserve's traditional backstop following SVB's collapse, new data shows. Lenders took up $153 billion from the Fed's discount window in the week to March 15, topping a previous high of $111 billion. Banks also borrowed $11.9 billion from the Fed's new emergency loan tool launched following SVB's downfall. The global banking system has come under pressure in the wake of Silicon Valley Bank's demise. The move followed a turbulent few days for the regional lender as fears of depositors pulling funds sparked a selloff in its share price following SVB's implosion.

☆ Our bank deposits are safe, that is really important: Allianz's Mohamed El-Erian
▼ + stars: | 2023-03-15 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailOur bank deposits are safe, that is really important: Allianz's Mohamed El-ErianMohamed El-Erian, Allianz and Gramercy advisor and president of Queens' College, Cambridge, joins 'Squawk Box' to discuss if we're starting a full-blown banking crisis, what the Federal Reserve should do at upcoming meetings, and more.

☆ Mohamed El-Erian says the Fed's credibility is at stake as financial accidents spread
▼ + stars: | 2023-03-15 | by ( Hakyung Kim | ) www.cnbc.com time to read: +2 min

The Federal Reserve failed to slow down its aggressive rate hikes in time, and now as a series of bank crises mount, the central bank's credibility is on the line, said economist Mohamed El-Erian. "One is a set of bank management issues and lapses in supervision," El-Erian said on CNBC's "Squawk Box" Wednesday. He explained that the Fed's "flip-flopping" between higher and lower interest rate hikes has contributed to the recent market instability, saying that's the third element. This news renewed the rout in U.S. bank stocks that began last week with troubles at Silicon Valley Bank and Signature Bank. It is captive to an outdated monetary framework," El-Erian said.

☆ SVB: What the worst bank failure since 2008 means for markets, the financial sector, and interest rates
▼ + stars: | 2023-03-14 | by ( Zahra Tayeb | ) www.businessinsider.com time to read: +8 min

Here's what SVB's sudden demise means for markets, the US banking sector, and interest rates. That capped a turbulent week that saw a botched fundraising attempt by Silicon Valley Bank (SVB) and a $1.8 billion loss on its bond holdings, which ultimately triggered an old-fashioned bank run. Silicon Valley Bank's collapse exposed a serious risk many banks face in their business portfolios – the dependence on uninsured deposits. However, former Treasury chief Larry Summers took a less pessimistic view, saying SVB's collapse was "unlikely to be a broadly systemic problem." But as bad as it is, it's unlikely to trigger a repeat of the 2008 global financial crisis that set the stage for the Great Recession, according to analysts.

☆ Inflation cooled down again in February as the Fed wrestles with the Silicon Valley Bank failure
▼ + stars: | 2023-03-14 | by ( Madison Hoff | ) www.businessinsider.com time to read: +4 min

The consumer price index rose 6.0% year-over-year in February, less than January's year-over-year change of 6.4%. The cooldown should be welcome news to the Fed as it prepares for its interest rate decision next week. According to Tuesday's consumer price index (CPI) report from the Bureau of Labor Statistics, CPI soared 6.0% year-over-year in February. More specifically, the change for the index for food at home was 10.2%, higher than the year-over-year change of 8.4% for food away from home. The Fed will also have to confront a new round of financial turmoil after regulators recently closed Silicon Valley Bank and Signature Bank.

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