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☆ Mohamed El-Erian slams Powell's suggestion that the bank turmoil is over – says it could be added to a list of Fed communications that eroded its credibility.
▼ + stars: | 2023-05-04 | by ( Zinya Salfiti | ) www.businessinsider.com time to read: +3 min

Mohamed El-Erian raised doubts about Fed chair Jerome Powell's suggestion that the worst of the banking turmoil is over. PacWest is the latest bank to be hit by uncertainty, with its shares tumbling more than 50% in after-hours trading Wednesday. El-Erian said Powell's remarks may get added to a list of Fed communications that ended up eroding its credibility. It is the latest regional bank to be hit by the turmoil that started with Silicon Valley Bank's collapse in March. It's important the Fed notes that this doesn't mean the banking system as a whole is facing an existential crisis, he added.

☆ Mohamed El-Erian: 4 Unintended Consequences of the First Republic Deal
▼ + stars: | 2023-05-02 | by ( Zinya Salfiti | ) www.businessinsider.com time to read: +3 min

Mohamed El-Erian said JPMorgan's takeover of First Republic could lead to "potential collateral damage". It's another case of US government institutions settling for a "second best" solution, he wrote in a Bloomberg op-ed. El-Erian warned of four unintended consequences from the deal including "a more concentrated banking system" and the risk of deeper credit crunch. Yet the potential collateral damage and the unintended consequences are far from immaterial," El-Erian wrote in an op-ed for Bloomberg on Monday. The chief economic adviser at Allianz warned of four notable unintended consequences for the US financial system, that could emerge from the final outcome of the First Republic narrative.

☆ Are we in a recession? Elon Musk says the pile of failed banks proves it.
▼ + stars: | 2023-05-02 | by ( Phil Rosen | ) www.businessinsider.com time to read: +5 min

As for today, let's see what Elon Musk and Larry Summers have to say about the state of the economy. In any case, ex-Treasury Secretary Larry Summers said recession odds for the next year are now sitting at 70%. These six factors suggest the stock market bottomed last October. Morgan Stanley's top equity strategist Mike Wilson thinks investors are banking too hard on a potential Fed rate cut this year. That discrepancy could set the stock market up for a sell-off, in his view.

☆ First Republic takeover is 'undoubtedly, unambiguously' beneficial to JPMorgan: Mohamed El-Erian
▼ + stars: | 2023-05-01 | 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 EmailFirst Republic takeover is 'undoubtedly, unambiguously' beneficial to JPMorgan: Mohamed El-ErianMohamed El-Erian, Allianz and Gramercy advisor and president of Queens' College, Cambridge, joins 'Squawk Box' to discuss the fallout from JPMorgan's takeover of First Republic, what this means for the Fed's rate hike path, and more.

☆ Here are the 4 issues that will determine the future of the global economy, according to Mohamed El-Erian
▼ + stars: | 2023-04-28 | by ( Morgan Chittum | ) www.businessinsider.com time to read: +3 min

Mohamed El-Erian says there are four issues that will shape the future of the global economy. El-Erian say the Fed's efforts to reduce inflation and the US debt ceiling are key factors looking ahead. Sign up for our newsletter to get the inside scoop on what traders are talking about — delivered daily to your inbox. download the app Email address By clicking ‘Sign up’, you agree to receive marketing emails from Insider as well as other partner offers and accept our Terms of Service and Privacy PolicyIt is an uncertain time for the global economy. As narratives continue to shift, Wall Street's views range from predictions of a full on stock market crash to a soft landing of the economy.

☆ Here are 3 things Mohamed El-Erian is watching out for in earnings this week
▼ + stars: | 2023-04-24 | by ( Pia Singh | ) www.cnbc.com time to read: +2 min

In a market plagued by uncertainty, Mohamed El-Erian is turning to this week's earnings — from key technology names such as Microsoft and Alphabet , to industrial heavyweights General Electric and General Motors — for further clarity. "Given what we know, and especially what we don't know, I wouldn't bet against these markets. I wouldn't bet in favor of these markets," El-Erian, Allianz and Gramercy advisor and president of Queens' College, Cambridge University, said Monday on CNBC's "Squawk Box." When all is said and done, first-quarter earnings for companies in the entire index are estimated to decline 5.2%, however, per Refinitiv. Also due this week: U.S. first-quarter GDP, March's personal consumption expenditures price index (the Fed's favorite inflation gauge) and April's consumer sentiment data.

☆ The bond market recognizes that there is a lot of uncertainty: Allianz's Mohamed El-Erian
▼ + stars: | 2023-04-24 | 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 EmailThe bond market recognizes that there is a lot of uncertainty: Allianz's Mohamed El-ErianMohamed El-Erian, Allianz and Gramercy advisor and president of Queens' College, Cambridge, joins 'Squawk Box' to discuss the upcoming earnings results this week and more.

☆ 'The equity market is poised to struggle in the weeks and months ahead': Comerica Bank's CIO says the S&P 500 is primed for a 15% drop as weak earnings, high valuations, and a hawkish Fed all work aga
▼ + stars: | 2023-04-22 | by ( William Edwards | ) www.businessinsider.com time to read: +6 min

Year-to-date, the S&P 500 is up 8%. Plus, when the Consumer Price Index is between 4-6% like it is now, it usually dictates that the S&P 500 trades at a lower multiple than it is. "For example, at the current S&P 500 P/E of 19, the earnings yield for stocks is 1 divided by 19, or ~5.2%. While he sees 15% downside in the months ahead, he also believes the S&P 500 will return to current levels by the end of 2023. Morgan StanleyWilson has also repeatedly warned of an earnings recession ahead, and recently said that the pullback in lending from banks strengthens his case.

☆ Russia is landing new buyers for its sanctioned diesel all over the world and Brazil's taking advantage of the steep discounts.
▼ + stars: | 2023-04-22 | by ( Phil Rosen | ) www.businessinsider.com time to read: +5 min

Today we're talking energy — and I'm sharing a conversation with a leading expert on Russian diesel flows. Phil Rosen: You shared some data on how Brazil is seeing a dramatic uptick in Russian diesel imports, and a decrease in diesel imports from other sources, including the US. It really does appear that Russian diesel is muscling in on US market share in Brazil. How does this data on Brazil's diesel imports fit into the broader picture with China and India? Russian diesel is displacing traditional suppliers to these countries, while trade flows are changing to backfill the loss of Russian diesel into Europe.

☆ US stocks rise but close lower for the week as investors mull mixed bag of corporate earnings
▼ + stars: | 2023-04-21 | by ( Morgan Chittum | ) www.businessinsider.com time to read: +2 min

US stock indices rose Friday as investors digested mixed earnings reports. However, all three major gauges closed the week in the red. Alphabet and Amazon are on deck to report quarterly results next week. According to FactSet, more than 75% of S&P 500 companies that have reported so far have exceeded analysts' earnings expectations. Mega-cap tech like Alphabet and Amazon are on deck for next week's quarterly results.

☆ The US economy is facing the ultimate 'trilemma' as the Fed desperately tries to get inflation down, Mohamed El-Erian says
▼ + stars: | 2023-04-20 | by ( Morgan Chittum | ) www.businessinsider.com time to read: +2 min

Policymakers are navigating a "trilemma [of] price stability, maximum jobs, and also financial stability," he told Bloomberg TV. Meanwhile, a credit contraction in the bank sector is equivalent to 25-50 basis points of tightening. "This just makes the Feds' ability to navigate this trilemma [of] price stability, maximum jobs, and also financial stability that much harder," he told Bloomberg Television Thursday. The credit contraction will have a similar effect on the economy that Fed rate hikes do, equivalent to about 25 to 50 basis points, El-Erian estimated. The central bank has been on a monetary tightening campaign for over a year, raising borrowing costs by 475 basis points to combat decades-high inflation.

☆ 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.

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