RT @YahooFinance: "We came out of [the FOMC meeting] with three things that hardly ever coexist," Allianz Chief Economic Adviser @ElErianM…
Mohamed A. El-Erian Thu 18 Mar 2021 13:38

By questioning #jobs dynamism, this also complicates the #Fed’s policy approach and highlights call on other policymakers to avoid a strong recovery with insufficient jobs: Philly manufacturing index surged to its highest level since 1973 (51.8 versus consensus expectation of 23)
Mohamed A. El-Erian Thu 18 Mar 2021 13:38

Adding to the @FederalReserve's policy headaches this morning, weekly US #jobless claims came in worse than expected--both initial (770,000 versus consensus expectation of 700,000) and continuing claims (4.12 million versus 4.03 million). #economy #jobs #employment #unemployment
Mohamed A. El-Erian Thu 18 Mar 2021 12:58

While the #Fed was more dovish than expected yesterday in the context of a significantly better economic outlook and rising inflationary expectations -- thus the unhappiness of the US bond #markets -- #Brazil and #Turkey hiked rates more than expected and currencies strengthened. https://t.co/BW4mBsBvx1
Mohamed A. El-Erian Thu 18 Mar 2021 12:43

3 key questions facing economists/#investors: Is the #Fed losing control of the bond market? To what extent will this undermine the #liquidity paradigm that has boosted asset prices for so long? How vulnerable is the economy to potential adverse spillovers from volatile #markets?
Mohamed A. El-Erian Thu 18 Mar 2021 11:38

The #Fed’s moderating influence on government #bonds didn’t last long. Yields are on the move again with the US 10-year above 1.70% on #inflation concerns. This is putting pressure on risk assets previously benefiting most from the massive #liquidity flows, including the #NASDAQ https://t.co/Tb1qgUSd2p
Mohamed A. El-Erian Thu 18 Mar 2021 11:18

RT @economics: The Fed pulled off a nearly impossible balancing act with the markets that's going to be increasingly difficult to repeat, @…
Mohamed A. El-Erian Thu 18 Mar 2021 00:58

Key key key remark by @FederalReserve Chair Jerome #Powell so far IMO: "We will not act preemptively based on forecasts." Not only does this #Fed want to wait to see the whites of the eyes of #inflation, it will also need to be convinced that inflation isn't a transitory process.
Mohamed A. El-Erian Wed 17 Mar 2021 18:58

The ultra dovish policy-related opening remarks by @FederalReserve Chair #Powell went one step further than the statement. As of now: #Stocks like it; and #Bonds opting for #Fed liquidity continuing to act as gravity on yields, well offsetting over-heating concerns. Q&A starting.
Mohamed A. El-Erian Wed 17 Mar 2021 18:43

Interesting to see how the #dollar has weakened on the #Fed announcement. The DXY index is now lower on the day, after being consistently higher. #markets #currency #fx https://t.co/Jjgl52eRIk
Mohamed A. El-Erian Wed 17 Mar 2021 18:33

.@FederalReserve significantly upgraded economic projections: 2021 growth sharply higher at 6.5%; PCE inflation and core up from 1.8% each to 2.4% and 2.2%; Unemployment rate lowered to 4.5% for December. Avr anticipated rate hike moved slightly earlier. Statement hardly changed: https://t.co/o8NprzsitS
Mohamed A. El-Erian Wed 17 Mar 2021 18:13

The @FT on how the " #Spac boom [has] eclipse[d] 2020 fundraising record in [a] single quarter: Blank-cheque companies now a #WallStreet staple, boosted by [the] abundance of #investor cash." Link #spacs #investing #investors #markets https://t.co/3s7Z2fWrhz
Mohamed A. El-Erian Wed 17 Mar 2021 15:57

From @CNBC Consistent with the ongoing gradual process of greater institutional adoption of #Bitcoin (see prior articles) Points also to the intensifying tug of war between accelerating/broadening private sector involvement and a still-ambiguous/ambivalent public sector attitude. https://t.co/E9wo8sqrCI
Mohamed A. El-Erian Wed 17 Mar 2021 15:32

FYI below, a good thought exercise for market participants and economists ahead of today's Federal Reserve meeting Simple question for you: What would you do if you were in Chair #Powell's position? #markets #investors #fed @federalreserve #traders #investing #stocks #bonds @ft https://t.co/pk7vQT5fw8
Mohamed A. El-Erian Wed 17 Mar 2021 13:52

This, from @FerroTV show, summarizes well the bullish case on #WallStreet--i.e., yes, there are challenges with #Fed-driven #markets,but they are "distant ones." For now, #investors should continue to ride the liquidity wave. I understand the argument but am uncomfortable with it https://t.co/3Vq2MxBF3c
Mohamed A. El-Erian Wed 17 Mar 2021 13:27

This, from my @bopinion article two weeks ago, remains in play for the @FederalReserve. But, with a press conference, it is hard for Chair #Powell to follow Aaron Burr's advice The immediate question for #traders is how much of the Chair's dilemma is already reflected in #markets https://t.co/yccZJfrbQh
Mohamed A. El-Erian Wed 17 Mar 2021 13:17

Market expectations for US inflation continue to creep higher. As an illustration, please see the Bloomberg chart (below) for the 5-year break-even rate. #economy #markets #inflation #economics #investing #investors #bloomberg https://t.co/wxVwgjNnFN
Mohamed A. El-Erian Wed 17 Mar 2021 12:47

... as to potential #investment implications, this may be of interest (posted yesterday): Link @ft #investing #investors #markets @federalreserve #Fed #bonds #stocks
Mohamed A. El-Erian Wed 17 Mar 2021 12:17

In US pre-market, the #NASDAQ is now indicated to open 1% lower, well under-performing the Dow, as ... you guessed it ... the yield on 10-year US government bonds rises to 1.67%. This continued unusual correlation is yet another indication of the dominance of the liquidity factor https://t.co/NvTK4y3ab6
Mohamed A. El-Erian Wed 17 Mar 2021 12:07

With a recovering #economy, higher inflationary expectations and rising bond yields, the #Fed faces today the combined challenge of Striking the right balance on policy guidance; Providing credible dot plots; and Not destabilizing excessively dependent and elevated risk #markets
Mohamed A. El-Erian Wed 17 Mar 2021 11:57

With Dispersion in growth performance being one of my big four macro themes for 2021, I was particularly interested in this @FT article on the growing Europe-US gap: Link (My other three themes are Inequality, Debt and the great Main Street-Wall St Disconnect.) https://t.co/xiOgsDPbKH
Mohamed A. El-Erian Wed 17 Mar 2021 01:37

Posted earlier today: Thoughts on how #investors can navigate the growing uncertainties associated with two factors that have been extremely supportive to date: Ample and predictable @federalreserve liquidity injections, and The TINA/FOMO market psychology Link https://t.co/tKRjLQKEug
Mohamed A. El-Erian Wed 17 Mar 2021 01:07

The opening and closing paragraphs from @martinwolf_'s latest column in the @FT "Economies can survive a stock market crash: If a correction is due to higher rates and stronger growth, it would not matter much — except to investors." #markets #investors #investing #stocks #bonds https://t.co/e92zUIu71K
Mohamed A. El-Erian Tue 16 Mar 2021 21:22

3 main US indices ended essentially unchanged (Dow's -0.4% to NASDAQ's +0.1%) Getting there, however, was far from straightforward. With yields lower intra-day, the NASDAQ was up 1% plus and out-performing the Dow by more With yields slightly higher, these 2 advantages dissipated https://t.co/j0y0cze0wx
Mohamed A. El-Erian Tue 16 Mar 2021 21:11

Good morning FYI, my thoughts on how #investors can navigate the growing uncertainties associated with two factors that have been extremely supportive to date: Ample and predictable @federalreserve liquidity injections, and The TINA/FOMO market psychology. Link https://t.co/7OOnVgv2Gl
Mohamed A. El-Erian Tue 16 Mar 2021 11:56