Hard landing possible, reiterates his view that Jay Powell was more dovish than markets had expected, says there is still only a 55% chance of a soft landing. https://youtu.be/-8V5tm8-qRg?si=G1EXAaiMh-w5NPCg Notes: Following up on his op-ed in the FT, El-Erian argues we will see more volatility following Jay Powell’s Johnson Hole
Mohamed El-Erian thinks the bond market is pricing in too many fed rate cuts in 2024 and in the next 12 months. Speaking on Bloomberg surveillance, Mohamed El-Erian repeated his arguments that the fed needs to stem erosion of the “3 anchors of stability.” Said here has been a narrative
El-Erian believes the fed must cover key policy areas at Jackson Hole to avoid more future market volatility. Writing in Bloomberg, El-Erian says the Fed’s Jackson Hole meeting comes amid “erosion of 3 anchors of stability,” including economic growth, “effective” policy guidance and technical vulnerability as the result of pockets
El-Erian thinks the employment situation is vulnerable, but the fed sees them as balanced. Mohamed El-Erian, speaking and writing on Bloomberg, has been warning for some time that the fed may be behind the curve and that the labor market has been weakening. Surprised by the speed with which
Speaking on Bloomberg and explained in his column, El-Erian believes the BOJ has hit the “rewind” button on the carry trade unwind rather than the “pause” button, thus setting up further problems down the road. Elaborating on why the BOJ, El-Erian responded “no one wants to be the volker moment.
Writing in Bloomberg, El-Erian makes the case that the dfed should not react to market volatility by signaling a larger or even a emergency meeting cut. El-Erian enumerates possible reasons for recent market volatility, including 1) Recent economic weakness 2) that rates are too high 3) crowded positioning 4) geopolitics
Speaking on Bloomberg, El-Erian says that the economy is slowing faster that the fed anticipated, and that the fed should be cutting rates. Says that the fed should not start with a 50bps cut because it would signal a mistake, but says that the fact that people are talking about
Writing in the FT, Mohamed El-Erian again called for changes to the fed to make changes. The changes include a long list which El-Erian has largely touched on before, including: a reexamination of why the fed’s forecasts have been so wrong, 2) Developing a strategy instead of relying on short-term
Writing an Opinion in the FT, Mohamed El-Erian reiterated some of his earlier points about the last mile of inflation. El-Erian noted that the US has continued to outperform other developed economies internationally. However, El-Erian warned that reaching the Fed’s 2% inflation target in the near term was unlikely and
Speaking on Bloomberg, Mohamed El-Erian said that he does not expect disinflationary trends to continue, citing 2 cost-push pressures. First, El-Erian cited restricted shipping in the Red Sea driving container costs up and restricting supply of key products. Secondly, El-Erian cited tight labor markets and high wage pressures. El-Erian sees
El-Erian believes this CPI report will show inflation coming down, but sees risks of inflation remaining sticky or accelerating in the next 3 months. Drivers of sticky or accelerating inflation could include further disruptions to supply chains, limited additional goods disinflation along with above target services inflation, and less