Mohamed A. El-Erian
@elerianm
Rene M Kern Prof of Prac at Wharton. Allianz Advisor. Gramercy Chair. Chair of UnderArmour Board. Former Pimco CEO/co-CIO and President of Queens' Col Cambridge
1.2K Following 1.1M Followers
“Harnessing AI’s potential to increase prosperity without destabilizing society requires coordination,” write @alexolegimas, @elerianm, and James Manyika.
To harness AI’s “potential to increase prosperity,” governments should work in concert, write @alexolegimas, @elerianm, and James Manyika. “Washington can start by forming a U.S.-led coalition built around trusted partners willing to accept common safety and security standards.”
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“AI holds the promise of providing both the productivity boost and the tools to pave the way for discoveries that can address many of the problems weighing down aging, debt-ridden societies across the world,” write @alexolegimas, @elerianm, and James Manyika.
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In an important change that's both needed and will be welcomed by many, Federal Reserve Chair Kevin Warsh just announced a shift in the FOMC meeting schedule to allow for deeper, strategic discussions.
Next year, one of the eight traditional policy meetings will be dedicated to a more strategic discussion. That is likely to rise to two in the following year.
#economy# #markets# #centralbanks# #federalreserve#
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Quite a few of those now calling for rate hikes because inflation has exceeded target for over five years supported a series of rate cuts last year—when inflation had already been above target for four years.
This isn't an argument against a policy response; inflation demands one. But there remains far too much focus on monetary policy and far too little on tools better suited to the task, including fiscal consolidation (an issue detailed in my September FT column).
#economy# #markets# #inflation# #federalreserve# #centralbanks#
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As widely expected, the Fed kept interest rates unchanged in a 10–2 vote.
De facto avoiding forward guidance, the FOMC's statement noted that "the accumulation of more information will help the Conmittee determine the policy stance appropriate to ensure a timely return of inflation to the Committee's 2 percent target."
Both dissenters favored a rate hike.
Attention now shifts to Chair Warsh's press conference.
#economy# #markets# #federalreserve# #centralbanks#
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From the Bank of Canada's statement accompanying the decision to hike interest rates.
#economy# #markets# #canada# #centralbanks#
Bloomberg: "A new anxiety is gripping Wall Street as it bankrolls the vast network of data centers and chips behind the artificial intelligence boom: Early signs suggest that the credit market is approaching the limits of how much more debt it can absorb.
One after another, yields are soaring into the double digits on bonds and loans funding the AI infrastructure buildout. Bankers are finding it more difficult to offload risk to insurers and other investors."
#economy# #markets# #debt# #ai# #ArtificialIntelligence# #bonds#
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John Healey, UK Chancellor of the Exchequer, is presenting the first budget of Prime Minister Andy Burnham’s government.
Key takeaways so far:
• Fiscal Trajectory: Reinforces Britain’s multi-year fiscal consolidation path, with declining deficits and borrowing.
• Headroom: Targeted at £15 billion, understandably using some of the previous buffer to absorb recent external shocks, including higher inflation from war-related energy disruptions.
• Design: Protect vulnerable households, improve economic resilience, and boost growth.
The market's initial reaction is favorable.
#economy# #markets# #uk# #budget#
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Good morning.
The attached, from the Bloomberg article "US-Friendly Nations Slash Treasury Purchases by 60%, Led by Asia," points to a development that I've been writing about:
Historically dependable buyers and holders of US government bonds have been pulling back, driven by both local and global factors.
As such, the buyer base has been shifting towards more tactical, short-term investors and traders.
#economy# #markets# #bonds# #yields#
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“AI adoption risks repeating the mistakes of globalization.” Read @alexolegimas, @elerianm, and James Manyika on how governments can avoid a backlash to artificial intelligence.
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Quite a favorable beat for US Consumer Confidence this morning:
The October Conference Board index jumped from a revised 84.2 to 91.7, well above expectations, while inflation expectations fell to 4.7% (from 5.1%).
Together with today's durable goods and housing, today's US data all surprised to the upside.
#economy# #markets#
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As the Fed's two-day meeting gets underway, here is market pricing via Bloomberg for rate hikes (chart). This includes a very low (~10%) probability of an October move and a high (~80%) probability of one priced in for December.
#economy# #markets# #federalreserve# #centralbanks#
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Read @alexolegimas, @elerianm, and James Manyika on how governments can “turn AI’s capabilities into broadly shared and enduring prosperity.”
Two notable global macro data points this morning:
Consumer confidence in France fell more than expected in October, dropping to its lowest level since 2013.
China’s industrial profits and South Korea’s GDP numbers serve as a reminder of the role electronics and semiconductors play in driving global growth.
#economy# #markets# #china# #france# #korea#
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The Federal Reserve kicks off its two-day meeting today, with markets overwhelmingly expecting tomorrow's announcement to hold rates unchanged.
We should expect a relatively hawkish tone in the remarks that follow, given the string of recent inflation data.
Dissents on the decision are possible, though that's less clear.
#FOMC# #FederalReserve# #economy# #markets# #centralbanks#
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Nothing but enormous admiration for the "Gstaad Guy." He's that rare combination of wit, depth, intellectual curiosity, thoughtfulness, and genuine warmth.
A real pleasure and privilege joining him on his podcast. Thank you!
@GstaadG @GstaadX #gstaadguy#
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“The potential of AI is a combination of the Industrial Revolution, whose general-purpose technologies transformed production, and the Enlightenment, which brought about inventions for making inventions,” write @alexolegimas, @elerianm, and James Manyika.
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A clip from this morning's conversation on CNBC's Squawk Box.
#economy# #markets# #tech# #ai# #ArtificialIntelligence# @CNBC @SquawkCNBC
