Mohamed A. El-Erian Re-poster

February’s preliminary UMich US Consumer Sentiment data exceeded consensus projections across the board. This positive trend was not restricted to assessments of current or future conditions alone; notably, 1-year inflation expectations moderated, falling to 3.5% from the prior 4.0%. Nevertheless, two specific details deserve attention. The uplift in sentiment was driven primarily by households with investments in the stock market. Additionally, long-term inflation expectations for the 5-10 year period crept upward, shifting from 3.3% to 3.4%.

#economy #markets #growth #inflation

Consider this perspective on current trading conditions. When taking into account the magnitude and distinct character of the market volatility witnessed this week, one has to wonder about the US Dollar Index (DXY). Were you anticipating a more significant flight-to-quality recovery rising from its latest low point? #economy #markets #dollar

In today's Morning Money column for Politico, Victoria Guida and Sam Sutton discuss President Donald Trump's pick for Federal Reserve chair, Kevin Warsh. They report that Warsh is committed to enacting substantial transformations at the central bank. Perhaps the most notable departure from current practice will involve one of the most potent instruments available to the Fed: its communication strategy. Essentially, expectations are high that the institution will become far quieter under his leadership. I find myself in agreement with this potential new direction, as do many who worry that the efficacy of forward guidance is diminishing. Far too frequently, recent signals from the Fed have appeared disorganized, which has accidentally fueled preventable instability.
#economy #markets #federalreserve @politico @vtg2 @samjsutton

In today's always-informative Morning Money column for Politico, writers Victoria Guida and Sam Sutton discuss the implications of President Donald Trump nominating Kevin Warsh as Federal Reserve chair. Warsh has pledged to bring significant changes to the central bank, with a major focus on refining one of its most potent instruments: communication. The prevailing expectation is that the Fed will become noticeably quieter under his leadership. I find myself in agreement with this potential shift, along with many others who fear that forward guidance is no longer working as intended. Recent messaging has frequently felt disjointed, resulting in confusion that drives preventable volatility.
#economy #markets #federalreserve @politico @vtg2 @samjsutton

Featured here is the cover for the current weekly issue of @TheEconomist magazine.

We wanted to provide a brief look at the current market situation. Due to the continuation of forced liquidations and the issuance of new margin calls, the price of Bitcoin has dropped by 25% during this week. The substantial scale and disorderly nature of this sell-off are now affecting crypto-adjacent assets and extending to areas beyond them.
#markets #crypto #bitcoin

The President of the ECB, Christine Lagarde, responded to questions about the nomination of Kevin Warsh during her press conference. She remarked that she has known him well dating back to the Global Financial Crisis and added that she very much welcomed the announcement.
#economy #centralbanks #ecb #federalreserve #kevinwarsh

We are observing a significant trend in the fixed income sector as the US yield curve maintains its steepening trajectory. The spread for the 2s-10s has expanded to 73 bps, marking the largest gap recorded since early 2022.
#economy #markets #bonds

The more speculative areas of the financial system appear to be caught in a cycle of margin calls and forced deleveraging. This trend is underscored by silver dropping 10% and Bitcoin retreating to levels below $70,000.
#bitcoin #gold #markets

We are seeing some eye-opening figures from Challenger regarding the US labor market. During January, the number of announced job cuts increased to more than double the volume from the previous year, reaching a peak not seen since the Great Recession of 2009. This trend is especially striking because it coincides with a GDP growth rate of approximately 4%. We are witnessing an acceleration in the disconnect between employment stability and economic expansion. If this phenomenon continues, the implications for our economic, political, and social structures could be profound.
#economy #markets #jobs #employment #unempoyment

Although the consensus anticipated a 7-2 vote, the MPC ultimately reached a closer 5-4 split while maintaining steady interest rates. The Bank of England noted "building slack in the labor market" in its commentary, sending a dovish signal that encouraged markets to somewhat accelerate their easing expectations for 2026. Consequently, traders are now pricing in two rate cuts for the year, effectively shifting the timeline for the initial move from June to April.
#economy #markets #centralbanks @bankofengland

Here are insights regarding the nomination of Kevin Warsh, drawn from the @FT column authored by @martinwolf_.

#economy #federalreserve #markets

We are seeing Brent oil test the $70-per-barrel level for the second time within a single week. If this pricing is sustained—though that remains a major uncertainty—it could weaken a key force that has been helping to lower inflation. This possibility arises at a time when upward pressure is already impacting other CPI, PPI, and PCE components, raising the risk of a broader trend.
#economy #markets #inflation #oil

A revealing chart shared by @RickRieder illustrates a universal rise in the median age of those purchasing homes. This trend serves as a clear indicator of mounting stress regarding housing affordability. Linked to this issue are two key consequences. First, there is a lock-out effect, meaning it has become increasingly difficult for first-time buyers to break into the market. Second, we are seeing a lock-in effect, where current homeowners find themselves struggling to upgrade to better properties.
#economy #markets #housing #affordability

Eurozone core inflation softer than anticipated

The headline inflation rate has decreased to 1.7%, falling beneath the 2% goal established by the ECB. At the same time, annual core inflation moderated to 2.2% during January. This figure represents the lowest point in more than four years, a shift supported by the services component slowing to 3.2%.

These statistics have emerged immediately prior to the central bank's policy meeting, where the general consensus is that interest rates will be held steady.

Looking deeper at the internal metrics, there is still considerable unevenness across the region. The divergence between the two biggest economies is particularly distinct. Germany is experiencing headline inflation of 2.1%, whereas the rate in France has dropped to only 0.4%.

#economy #inflation #Europe #markets

Reports from India's Economic Times highlight a statement made this morning by the Indian trade minister, confirming that the country plans to diversify its oil sourcing. This response follows President Trump's comments yesterday, which indicated that India would cease oil purchases from Russia to secure lower U.S. tariffs. As a result, China and Brazil are now the only significant economies left without a seemingly permanent arrangement. However, as illustrated by Canada's recent experience, it is important to recognize that these agreements are not set in stone and can be subject to future modifications.
#economy #markets #india

Earlier today, the trade minister of India confirmed plans to diversify the country's oil sourcing, as detailed in India's Economic Times. This follows President Trump's statement yesterday suggesting that India would discontinue purchasing oil from Russia in return for reduced U.S. tariffs. Consequently, only two significant economies, China and Brazil, have not yet finalized what might be considered a lasting agreement. However, drawing from Canada's recent experience, it is worth noting that such deals are not necessarily permanent and can still be subject to alteration.
#economy #markets #india

Greetings to all. Positive momentum is driving the precious metals sector today. Gold has successfully rallied to trade above $5,000 per ounce again, marking a 3% rise. At the same time, silver is upholding its reputation for higher volatility with a current gain of 7%.
#gold #silver #markets #investing #investors

Comparing Gold against Bitcoin
Thanks to the latest dynamics in the marketplace, Gold has taken the lead over Bitcoin when measured across a five-year horizon. As illustrated in the chart below from John Authers, this shift is quite clear. The trend of superior returns is unfolding throughout the current year and is even visible in today's trading action. According to CNBC charts, we are seeing a bounce in gold prices, whereas Bitcoin remains in a stagnant position.
#markets #gold #bitcoin @johnauthers @CNBC

The decision by Australia's central bank to implement a 25-basis-point hike today serves as a clear indicator of a trend likely to dominate the current year. We are witnessing a departure from the synchronized movements observed in recent years; instead, central banks in advanced economies are entering a phase characterized by significant policy divergence. This shift highlights a broader narrative involving growing dispersion within and among various economies. Along with fragmentation and volatility, this represents one of the three primary themes I anticipate unfolding throughout the year.
#economy #markets #centralbanks #australia