@elerianm
Professor, Wharton School, and Senior Fellow, Lauder Inst (both at UPenn). Allianz Chief Economic Advisor. Chair, UnderArmour Board of Directors. Board member, NBER. CFR. Former co-CIO/CEO PIMCO and President, Queens' College, Cambridge University.
...financial dynamics could shift from the more predictable mean reversion to the more uncertain "multiple equilibria" (that is, each new disruption makes it increasingly likely that the subsequent situation will drift even further from the initial condition.)
#economy #markets #MiddleEastConflict
On how to think about the economic and financial impact of the war:
The crucial question of duration and spread goes beyond narrow timing and the number of countries involved.
It also involves the "guardrails" currently under stress.
If they fail to hold,and it's a big IF,the economic and...
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While the economic and financial impact of the war is a function of its duration and spread, it's important to remember that the relationship is not linear.
There are tipping points that trigger their own adverse dynamics, including oil and gas (where Brent is approaching $85 a barrel and WTI $80).
Further to the previous post on energy prices: The relative magnitude of these yield moves is consistent with the inflation sensitivity to rising energy costs, as well as policy considerations.
#economy
The latest US Challenger Report is a relief after the shock of the previous release.
Following January's layoffs, which surged to the highest levels since 2009, February’s data is significantly less alarming.
At 48,307, layoffs were less than half the previous level, while hiring activity picked up
On some of the systemic effects of the war—from John Authers’ always-insightful daily note.
#economy #MiddleEastWar
The short-term round trip for US Treasuries is complete for now, with the 10-year yield back above 4.10%.
(My forthcoming Financial Times column will look at the divergence between net yield signaling and compounding economic and financial effects.)
#economy #markets @financialtimes.com
Facing internal and external headwinds, China has dialed back its 2026 growth target to 4.5–5.0%.
While this marks the lowest since 1991, it may still prove ambitious unless Beijing aggressively ramps up domestic economic reforms.
#economy #china #growth
From the WSJ: “Last year, a record 6% of workers in 401(k) plans administered by Vanguard Group took a hardship withdrawal. That is up from 4.8% in 2024 and a prepandemic average of about 2%,according to Vanguard
The data paint a divergent financial picture of American workers’ finances”
#inequality
Regarding US data, the ISM Services index for February was significantly higher than January’s and notably above the consensus forecast. Particularly encouraging was the rise in the forward-looking component to its highest level in more than a year.
#economy #markets
The US offer to provide protection and insurance for ships transiting the Strait of Hormuz is a necessary step, but is it sufficient?
While it helps with the ABILITY to navigate the Strait, there remains the question of ship owners'/operators' WILLINGNESS to do so.
#economy
On a lighter note, I just flew on one of United’s new Airbus A321neos and loved it!
They’ve added lots of little touches that really improve the overall experience, including something Singapore Airlines pioneered years ago: a hands-free pedal to open the trash bin! And how about the new lighting?
China’s economic hurdles increase:
Having lost access to Venezuelan oil, Beijing is now seeing a second source of cost-effective energy,Iran,falter.
This as the 2025 strategy of propping up growth through global export expansion to offset dwindling US shipments looks increasingly difficult to repeat
Another leg up in energy prices is pushing yields higher across advanced economies this mornjng.
Once again, the UK is acting as the “high beta” economy — the one with the biggest change which, unfortunately, erodes fiscal “headroom”just as growth faces additional headwinds.
#economy #uk
From @wsj.com: “Market ‘dispersion’ is hitting levels not seen in decades as investors sort AI winners from losers.”
(Recall that Dispersion — both within and across sectors and economies — is one of the three key themes I’ve highlighted for 2026, alongside volatility and fragmentation.)
#economy
The link to the conversation earlier today with Kelly Evans.
www.cnbc.com/video/2026/0...
#economy #markets #MiddleEastConflict
Thank you, Kelly Evans, for the interesting conversation on your show.
#economy #markets
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The rise in yield is more pronounced in advanced countries with less structural and cyclical resilience, such as the UK (see previous post).
#economy #markets #stocks #bonds #investing #investors
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Instead of the traditional "flight to safety" (which typically pushes yields down), US bond yields are up across the curve (Bloomberg table below) as inflation concerns also offset fears of slowing growth.
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As a new stagflationary wind starts blowing through the global economy in the midst of higher geopolitical risks – with its ultimate impact dictated by the duration and spread of the conflict – the US government bond market has opted for inflation concerns.
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After the classic immediate reaction (please see the post from last night), markets are starting to differentiate within and across segments, driven mainly by fundamentals and, to a lesser extent, technicals. This includes US stocks, where the NASDAQ has just turned positive for the day.
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...is true at the global level is not true for all countries. Some, such as the UK, are less resilient due to low growth and productivity, cost-of-living pressures, limited fiscal space, and a path to lower central bank rates that already is not straightforward
#economy #markets #MiddleEastConflict
The extent of this shock will depend on the duration and spread of the conflict.
While the global economy has proven impressively robust so far, that attribute is not infinite. Already, there has been a steady erosion of policy flexibility, financial buffers, and human resilience.
Moreover, what...
As I discussed just now with Nick Robinson on "Today" – and thank you very much, Nick, for having me on the show – the current Middle East conflict represents a negative shock to a global economy that has spent the last few years repeatedly on the defensive.
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Further to the prior post:
A classic initial market reaction to this weekend’s eruption of military conflict in the Middle East: Oil has surged over 10%, the Dollar has strengthened, and Dow futures have opened down some 500 points.
#economy #markets #oil #stocks #fx
From the @financialtimes.com Some initial thoughts on the economic and market implications of the Middle East conflict.
For a deeper dive, please check out my latest weekly note on the global economy and markets (links in the prior post).
#economy #markets #oil #MiddleEastConflict #iranwarupdate
Please find below the links to my weekly note on the global economy and markets:
open.substack.com/pub/mohamede...
www.linkedin.com/pulse/weekly...
#economy #markets
...and China.
There was also a striking divergence between Gold and Bitcoin; while both saw double-digit changes during the month, they moved in diametrically opposite directions.
Meanwhile, Oil continued its steady c2026 limb, ending the month in positive territory.
#markets #stocks #gold #bitcoin
The monthly performance table for major asset classes.
Dispersion, one of my three core themes for the year, was on full display in February. is below.
While global equity markets saw the S&P 500 and the Nasdaq slip into the red, those losses were offset by significant rallies in Europe, Japan,...
... by the "unlimited potential" of those working ON AI. This year, the conversation has shifted to the more complex issue of working WITH AI, from volatile sector-specific issues to geo-economic ones.
#economy #markets #AI @anthropic.com