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☆ Bond yields around the world coming down on growth concerns, says Mohamed El-Erian
▼ + stars: | 2022-10-24 | 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 EmailBond yields around the world coming down on growth concerns, says Mohamed El-ErianMohamed El-Erian, Allianz and Gramercy Advisor and president of Queens College, Cambridge, joins 'Squawk Box' to discuss market activity around the world, financial stability concerns behind the Fed slowdown, and global currency tensions.

☆ Mohamed El-Erian says don't cheer this rally as the Fed is still grappling with a 'trilemma'
▼ + stars: | 2022-10-24 | by ( Yun Li | ) www.cnbc.com time to read: +2 min

Mohamed El-Erian cautioned investors that this stock market rally is driven by the ever-changing expectations in Federal Reserve policy, and it shouldn't have lasting power. El-Erian, Allianz and Gramercy advisor and president of Queens College, Cambridge, said the Fed is dealing with a "trilemma" — growth, inflation and financial stability, and it could be forced to slow down tightening for financial stability concerns. This is because of financial stability. This massive front-loading of rate hikes will break something in the financial markets," EL-Erian said. "So if the Fed does slow, it is because we have financial stability concerns."

☆ Northwestern Mutual's chief strategist says the Fed could push the economy off a deflation cliff if it doesn't slow its pace — and shares 4 ways to hedge against declining earnings
▼ + stars: | 2022-10-21 | by ( Lisa Kailai Han | ) www.businessinsider.com time to read: +6 min

Brent Schutte believes that the Fed risks pushing the US economy into a deflationary environment. He shared four asset classes to hedge against the earnings decline that many analysts anticipate. While stubbornly persistent inflation has been top of mind recently for most investors, lately Brent Schutte has been growing increasingly worried about the opposite case — deflation. "2014 to 2020, we all were worried about deflation; that's what everybody wanted to talk about. But once the economy has reached a downturn, Schutte thinks that inflation won't continue to persist.

"The chancellor will come to the despatch box," he said when asked by Sky News whether the corporation tax plan would definitely stay. Newspapers reported that some lawmakers who never wanted Truss to replace Boris Johnson as leader in the first place already wanted her out. "I think that changing the leadership would be a disastrously bad idea, not just politically but also economically, and we are absolutely going to stay focused on growing the economy," Cleverly said of Truss. But a fire-sale in the government bond market has driven up borrowing costs and mortgage rates and forced the Bank of England to intervene to protect pension funds. read moreMeanwhile, as Truss battled with the turmoil, she met King Charles for a weekly audience at Buckingham Palace between monarch and prime minister on Wednesday.

☆ The Fed will 'probably break something', and more risks may need to be priced in as markets are fragile after an era of low rates and high liquidity, Mohamed El-Erian says
▼ + stars: | 2022-10-13 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The Fed will "probably break something" trying to bring down inflation, Mohamed El-Erian said. He pointed to the Fed's meeting minutes, which gloss over risks to market liquidity and functioning. "Markets are quite fragile after such a long period of zero interest rates and massive liquidity," he warned. "The Fed is so late, it will probably break something on the way to reducing inflation," El-Erian said. But El-Erian thinks markets need to price in even more risk.

☆ The US economy is 'doing very well' and there aren't signs of instability in financial markets despite intense volatility, Treasury Secretary Janet Yellen says
▼ + stars: | 2022-10-12 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The US economy is "doing very well" and there aren't signs of instability in financial markets, Janet Yellen said. Yellen pointed to the strong labor market, and added she believed inflation could come down without hammering jobs. "While there's some concern about liquidity in markets, I don't think we've see anything that rises to the level of a serious concern," she said. El-Erian has also warned markets of "unsettling volatility," pointing to turmoil in the bond market. "We really haven't seen signs of financial instability in the United States and our financial markets continue to function well.

☆ The Fed's September minutes fail to address challenges to financial stability, says Mohamed El-Erian
▼ + stars: | 2022-10-12 | 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's September minutes fail to address challenges to financial stability, says Mohamed El-ErianMohamed El-Erian, Allianz and Gramercy advisor and president of Queens' College, Cambridge, joins 'Closing Bell' to discuss problematic market outlook for economic growth, the potential need for the market to price in liquidity risk, and general remarks following the September Fed meeting minutes.

☆ Mohamed El-Erian said the Fed made 2 big mistakes that will go down in history and spur a damaging recession that was 'totally avoidable'
▼ + stars: | 2022-10-10 | by ( Isabella Zavarise | ) www.businessinsider.com time to read: +3 min

Top economist Mohamed El-Erian said the Federal Reserve made two big mistakes he thinks will go down in history. "I fear that we risk a very high probability of a damaging recession that was totally avoidable," he said Sunday. The Fed has been quickly raising interest rates in an attempt to cool down 40-year high inflation. "So yes, unfortunately, this will go down in a big policy error by the Federal Reserve," he said. "Even [Federal Reserve] Chair Powell has gone from looking for a soft landing to soft-ish landing to now talking about pain.

☆ Allianz Chief Economic Adviser El-Erian believes core inflation 'is still going up'
▼ + stars: | 2022-10-09 | by ( Ashley Capoot | ) www.cnbc.com time to read: +1 min

Ahead of the release of the latest consumer price index reading this week, Allianz Chief Economic Adviser Mohamed El-Erian told CBS' "Face The Nation" Sunday that he predicts headline inflation "will probably come down to about 8%," but that core inflation "is still going up." Core inflation is what measures the drivers of inflation and how broad they are, so El-Erian said an increase in core inflation means "we still have an inflation issue." Even if core inflation is still on the rise, however, El-Erian said it will eventually come down. "The question is, does it come down with a slowdown in the economy or a major recession?" The oil producer group OPEC+ announced its largest supply cut since 2020 on Wednesday, and El-Erian said this decision "does hurt the U.S.," as it risks causing inflation to increase again.

☆ The UK should ditch tax cuts, hike rates, and accept a deeper recession to avoid higher inflation, Mohamed El-Erian says
▼ + stars: | 2022-09-29 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

The UK needs to ditch its plan to cut taxes and instead hike interest rates immediately, Mohamed El-Erian said. Though aggressive rate hikes could cause a recession, the UK is past the point of hoping for a soft-landing, he warned. While the central bank averted an immediate financial crisis with its intervention, that's the opposite of what it should be doing to lower inflation, El-Erian warned. What we need is for the tax reductions to be withdrawn, we need the Bank of England to act on interest rates," El-Erian said in an interview with BBC on Wednesday. "Without [tax cuts], I would look to the Bank of England to make incredible increases in interest rates and I would accept a much deeper recession," he added.

☆ The UK is gripped by an economic crisis of its own making
▼ + stars: | 2022-09-29 | by ( Mark Thompson | ) edition.cnn.com time to read: +8 min

“While this is welcome, the fact that it needed to be done in the first place shows that the UK markets are in a perilous position,” said Paul Dales, chief UK economist at Capital Economics, commenting on the bank’s intervention. “It wouldn’t be a huge surprise if another problem in the financial markets popped up before long,” Dales added. The UK government should also postpone its tax cuts, El-Erian said. We look like reckless gamblers who only care about the people who can afford to lose the gamble,” one former Conservative minister told CNN. “Truss and Kwarteng are now facing a severe economic crisis as the world’s financial markets wait for them to make policy changes that they and the Conservative party will find unpalatable,” the Eurasia analysts wrote.

☆ Paul Krugman, Mohamed El-Erian, and Nouriel Roubini are tearing into UK leaders whose spending plans upended markets. Here's what the 3 top economists have said.
▼ + stars: | 2022-09-29 | by ( Theron Mohamed | ) www.businessinsider.com time to read: +4 min

Paul Krugman, Mohamed El-Erian, and Nouriel Roubini blasted the new UK government's spending plans. Here's what the three leading economists have said about the fiasco:Paul Krugman"Trussonomics is deeply stupid," Krugman tweeted on Wednesday. Advocates of supply-side economics tout tax cuts, deregulation, and lower borrowing costs as the best tools to drive economic growth. El-Erian slammed the UK's planned tax cuts as "unsettlingly large, relatively regressive and unfunded" in the column published Wednesday. Nouriel Roubini"Truss and her cabinet are clueless," Roubini tweeted on Saturday about the government's fiscal plans.

☆ Mohamed El-Erian says the relentless rise in yields is driving the direction of stocks and markets desperately need stabilization
▼ + stars: | 2022-09-29 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

The spike in Treasury yields is holding sway over other markets, Mohamed El-Erian said Wednesday. The 2-year and 10-year Treasury yields hit multi-year highs this week. So depending on what yields do, everything else follows and what we need desperately is a stabilization of yields. This week, the 10-year Treasury yield rose to 4% for the first time since 2010, and the 2-year Treasury yield climbed past 4.35% for the first time since 2007. There's technical damage taking shape in the markets, and El-Erian said he's been hearing complaints about liquidity.

☆ The 'disorderly' moves in the pound and loss of confidence in UK policy makers is historic, and point to the paradigm shift markets are headed towards, Mohamed El-Erian says
▼ + stars: | 2022-09-28 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The drop in the pound and the loss of confidence in policy makers is part of a larger paradigm shift, Mohamed El-Erian said. It points to the paradigm shift we're going through and the fragility of markets," he added. El-Erian has previously warned markets of the paradigm shift, pointing to central banks' pivot from quantitative easing to quantitative tightening as inflation continues to climb. To combat the potential for higher inflation, the UK will have to hike interest rates to keep inflation under control. But that could also cause enormous financial pain to households, causing unemployment and floating mortgage rates to skyrocket.

☆ Watch CNBC’s full interview with Allianz's Mohamed El-Erian
▼ + stars: | 2022-09-27 | 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 EmailWatch CNBC’s full interview with Allianz's Mohamed El-ErianMohamed El-Erian, Allianz chief economic advisor, joins 'Closing Bell' to discuss the Fed, global and U.S. markets.

☆ Yields are in the driver's seat, says Allianz's Mohamed El-Erian
▼ + stars: | 2022-09-27 | 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 EmailYields are in the driver's seat, says Allianz's Mohamed El-ErianMohamed El-Erian, Allianz chief economic advisor, joins 'Closing Bell' to discuss the Fed, global and US markets.

☆ UK lenders halt mortgage deals to customers after market chaos
▼ + stars: | 2022-09-27 | by ( Sophie Kiderlin | ) www.cnbc.com time to read: +3 min

Oli Scarff | Getty Images News | Getty ImagesLONDON - U.K. lenders Virgin Money, Halifax and Skipton Building Society pulled some of their mortgage deals to customers after the tumult in British bond markets. Virgin Money and Skipton Building Society temporarily paused mortgage offers for new customers, while Halifax — owned by the Lloyds Banking Group — is planning to halt any mortgage products with fees where lower interest rates are usually offered. Skipton Building Society said they had paused their products in order to "reprice following the market response over recent days." Markets have begun pricing in a base rate rise to as high as 6% for next year, from 2.25% currently, raising concerns among mortgage lenders and borrowers. "Households refinancing a two-year fixed rate mortgage in the first half of next year will see monthly repayments jump to about £1,490 early next year, from £863 when they took on the mortgage two years prior."

☆ Markets are now treating UK bonds like Greek and Italian debt
▼ + stars: | 2022-09-27 | by ( Julia Horowitz | ) edition.cnn.com time to read: +6 min

The price of benchmark 10-year UK government bonds also increased slightly. “This is a situation where government borrowing costs — and therefore all our borrowing costs — are incredibly vulnerable,” economist Mohamed El-Erian, an adviser to Allianz, told the BBC on Tuesday. It will drive up import costs, adding to pressure on the Bank of England to hike interest rates faster and higher. Previously, markets were absorbing about £100 billion ($108 billion) in UK bonds annually, according to Ross Walker, chief UK economist at NatWest Markets. Yet higher borrowing costs will have consequences for both the government and households.

☆ Sterling sinks to new low as 'mini budget' shatters investor faith in UK markets
▼ + stars: | 2022-09-26 | by ( Amanda Cooper | ) www.reuters.com time to read: +5 min

"It also puts more pressure on the Bank of England to increase interest rates," she added. read moreScottish First Minister Nicola Sturgeon called for the Westminster parliament to be recalled to hold an emergency session. "It's hard to overstate the scale of the economic crisis caused by Friday's UK budget," she said on Twitter. read moreEYES ON BOEIn light of the rout, strategists and economists said the Bank of England needs to do something to calm markets and restore credibility. "The market is now treating the UK as if it's an emerging market.

☆ Sterling sinks to new low as 'mini budget' hits investor faith in UK markets
▼ + stars: | 2022-09-26 | by ( Amanda Cooper | ) www.reuters.com time to read: +4 min

read moreOn Friday, he announced that he would cut a raft of taxes, but he did not detail how the government would fund it. , read moreIn light of the rout, strategists and economists said the Bank of England needs to do something to calm markets and restore credibility. The FTSE 100 (.FTSE) was roughly flat on the day, while the domestically focussed FTSE 250 (.FTMC) fell 1%. '1980S ON STEROIDS'Paul Dales, Capital Economics chief UK economist, said the central bank needed to take action. "The market is now treating the UK as if it's an emerging market.

☆ UK bond prices collapse after sterling hits record low
▼ + stars: | 2022-09-26 | by ( David Milliken | ) www.reuters.com time to read: +2 min

REUTERS/Dado Ruvic/Illustration/LONDON, Sept 26 (Reuters) - British government bond prices collapsed on Monday, pushing yields to their highest in over a decade, amid speculation that the Bank of England might need to take emergency action after sterling hit a record low against the U.S. dollar overnight. Two-year gilt yields rose as much as 54 basis points on the day to 4.533%, their highest since September 2008, and at 0754 GMT were 44 basis points up on the day at 4.43%. Five-year gilt yields jumped more than 44 basis points to 4.503%, their highest since October 2008, while benchmark 10-year yields hit their highest since April 2010 at 4.215%. read moreBond market veteran Mohamed El-Erian, chief economic advisor to Allianz, said Kwarteng either needed to reverse course, or to prepare for an emergency BoE rate hike. The BoE raised interest rates by half a percentage point to 2.25% on Thursday - its second consecutive half-point hike, after not increasing rates by that amount since 1995.

☆ I don't hope for markets to go down, says Mohamed El-Erian
▼ + stars: | 2022-09-26 | 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 don't hope for markets to go down, says Mohamed El-ErianMohamed El-Erian, Allianz and Gramercy advisor and president of Queens' College, Cambridge, joins CNBC's 'Squawk Box' to discuss his take on the global economy and what direction world equity markets are going.

☆ Morgan Stanley sees dollar surge setting the stage for 'something to break'
▼ + stars: | 2022-09-26 | by ( Jeff Cox | ) www.cnbc.com time to read: +4 min

The U.S. dollar's strength is setting the stage for a crisis, as well as a looming bottom in the stock market, according to Morgan Stanley. Fears are rising that the moves in the dollar will pressure corporate earnings, and "such US dollar strength has historically led to some kind of financial/economic crisis," Morgan Stanley equity strategist Michael Wilson and others said in a client note. "What's amazing is that this dollar strength is happening even as other major central banks are also tightening monetary policy at a historically hawkish pace," Wilson wrote. "The recent move in the US dollar creates an untenable situation for risk assets that historically has ended in a financial or economic crisis, or both," Wilson wrote. "In our view, such an outcome is exactly how something does break, which leads to MAJOR top for the US dollar and maybe rates, too," Wilson wrote.

☆ El-Erian says the Fed has made a 'policy mistake of historical proportions'
▼ + stars: | 2022-09-26 | by ( Jeff Cox | ) www.cnbc.com time to read: +2 min

Investors are paying the paying the price for the Federal Reserve's policy mistakes, according to Allianz economic advisor Mohamed El-Erian. "This is a two-part policy mistake of historical proportions," the former CEO of bond giant Pimco told CNBC's " Squawk Box " in a Monday interview. And now in the scramble to catch up, they are hiking aggressively into a strong economy, which will be phase two of the policy mistake." El-Erian spoke less than a week after the rate-setting Federal Open Market Committee approved its third consecutive 0.75 percentage point interest rate increase. "So we are going to have to navigate through this historical Fed policy mistake."

☆ Reactions: Britain's pound crumbles to record lows in firesale of UK assets
▼ + stars: | 2022-09-26 | by ( ) www.reuters.com time to read: +8 min

Wads of British Pound Sterling banknotes are stacked in piles at the Money Service Austria company's headquarters in Vienna, Austria, November 16, 2017. REUTERS/Leonhard Foeger/File PhotoLONDON, Sept 26 (Reuters) - Britain's pound plunged to record lows on Monday and bonds were slammed for a second day, as investors punished UK assets after the government's mini-budget announcement last week. The presentation of the mini-budget was received quite badly by the markets – sterling literally collapsed. The significant tax cuts announced by the Treasury Secretary cause concerns for the currency markets because of rising government debt." One is the loss of confidence in UK fiscal policy and that won't help sterling.

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