Mohamed A. El-Erian Re-poster

The Next Fed Chair: The Latest Insights from Prediction Markets

For those of you tracking "prediction markets," the latest data from Polymarkets concerning the next Federal Reserve Chair indicates a significant shift amidst high volatility (see chart below).

Currently, Kevin Warsh leads with a 50% probability, followed by Rick Rieder, who has surged to 28%. In contrast, the probability for Kevin Hassett—the former frontrunner—has plummeted to just 4% following President Trump’s recent public comments praising Hassett’s performance as NEC Chair and expressing a desire to keep him in that role.

#economy #markets #federalreserve @Polymarket

Update on the Next Fed Chair: Insights from the Prediction Markets

If you have been monitoring the prediction markets, you will notice considerable volatility and a major shift in the latest @Polymarket data regarding the selection of the next Federal Reserve Chair (see chart below).

Currently, Kevin Warsh has taken the lead with a 50% probability, while Rick Rieder has gained significant momentum, surging to 28%. In contrast, the previous frontrunner, Kevin Hassett, has seen his odds drop to just 4%. This decline occurred after President Trump publicly commended Hassett's work as NEC Chair and indicated a preference for keeping him in that position.

#economy #markets #federalreserve @Polymarket

Instead of the official theme, “A Spirit of Dialogue,” this year’s Davos meeting would have been more fittingly described as focusing on “Geo-economics.” We are witnessing a world where business strategies and economic results are profoundly shaped by domestic politics, national security, and geopolitics.

#economy #geoeconomics #Davos26 #davos #davos2026

We have reached a 578-year milestone with what we believe is the first-ever reunion of four Presidents of Queens’ College, Cambridge. In addition to coming together, we had the opportunity to thank Sandra Pope and Sylvia Clements, who have worked brilliantly with three of us.

@QueensCam @Cambridge_Uni #cambridge

Economic Data: UK CPI Release

The UK inflation figures are set to drop in less than an hour. The consensus forecast expects a slight acceleration, with the headline and core rates projected at 3.3% (and services, the main driver, holding around at 4.6%).

The Caveat: Please note that December inflation numbers have a historical reputation for high volatility.

#economy #markets #UK #inflation

Good morning.

Here are the market moves of interest in Asian morning trading:

Reprieve for global fixed income: Yields on 10-year Japanese bonds are down 6 basis points, providing needed stability to this market segment.

Continued precious metal surge: Gold prices continue their ascent, currently trading at $4,875 per ounce.

#economy #markets #gold #jgb #japan

It is truly a standout day for gold! Today’s price surge of 3%-plus follows directly after yesterday’s impressive gains (see chart). This momentum isn't limited to precious metals, as the energy sector is also rallying—both Brent and WTI crude are now trading securely above $60 per barrel.
#economy #markets #gold #oil

I appreciate the interesting conversation, Becky.
https://video.snapstream.net/Play/6falgRQgGCOP59E9CXYhNs?accessToken=s4xsgul0ykyx
#economy #markets @CNN @cnni @BeckyCNN

This Bloomberg headline serves as a follow-up to my earlier posts regarding actual and potential spillovers from an increasingly fragile Japanese bond market.

More generally, I want to highlight an issue that may still be flying under too many radars: the resumed steepening of global yield curves, including this morning's 8 bps move in the US 2s-30s.

#economy #markets #bonds #Japan #jgb

A key risk to both US government bonds and the dollar is that much of the rest of the world is already de facto “overweight” on them. Given this context, headlines like the one below are not helpful, even if this specific Danish fund’s Treasury holdings are minimal.

#economy #markets #bonds

Turning to non-economic issues that impact economic policy:

Just a quick reminder that we may receive a U.S. Supreme Court decision today regarding the legality of several U.S. tariffs. Furthermore, tomorrow marks the Supreme Court hearing for Federal Reserve Governor Lisa Cook (which Chair Jerome Powell is expected to attend—a move that could escalate the ongoing feud between the Trump Administration and the Federal Reserve).

#economy #markets #federalreserve #soctus #tariffs

We are observing a historically unusual combination of a weaker dollar and higher yields, which raises several questions. Is this spillover from Japan (referencing a previous post from earlier this morning), a "sell US" sentiment triggered by recent US-Europe tensions, or something else?

We must ask: What is the primary cause for this widespread selloff this morning, how long is it expected to last, and is the underlying dynamic one of repeated reset or an accumulation over time leading to a tipping point?

(Regarding the opening question above: It is all three.)
#economy #markets

The following passages from a Wall Street Journal article showcase some of the rising concerns within Silicon Valley regarding AI-driven dispersion. Even if these perspectives seem overly alarmist, they highlight the genuine risk of substantially greater inequality—across income, wealth, AND opportunity—if we do not effectively manage this era of historic transformation (something that is certainly achievable).

As noted by the Journal:

“Silicon Valley is filled with all sorts of dreams. But one of those wild-eyed ideas, long debated on subreddits and in hacker houses, is becoming a real-life nightmare…
The argument is that tech companies (and their leaders) will become a class unto their own with infinite wealth. No one else will have the means to generate money for themselves because AI will have taken their jobs and opportunities.”

#economy #ai #inequality #dispersion
@WSJ

On a day when geo-economics is again very much in evidence—including the possibility of an EU–US trade war over Greenland (with the UK seemingly caught in a messy middle)—gold has once more traded at a record high, exceeding $4,700 an ounce.

It is also notable that, for the reasons discussed in earlier posts regarding direct and spillover effects, Japanese yields continue to rise in what risks becoming a rather disorderly dynamic (e.g., Bloomberg headline below).

#economy #markets #japan #gold #jgb #geoeconomics

Here are four key points to consider regarding this morning's UK labor market figures:

* **Unemployment stays flat:** Matching consensus forecasts, the unemployment rate held steady at 5.1%, which represents a four-year high.
* **Job growth is cooling down:** Hiring activity continues to be sluggish, as monthly payroll employment dropped by 43,000 during December.
* **Wage pressures are easing overall:** For the three months ending in November, annual wage growth dipped slightly to 4.5%, down from the previous 4.6%.
* **Significant wage disparity:** The gap between sectors remains substantial, with public sector growth at 7.8% compared to 3.6% in the private sector.

Given that this data encompasses the period leading up to and immediately following the Budget, attention will now turn to future releases to track how these trends develop.

#economy #markets #UK #unemployment #wages #jobs

The latest economic figures for China have been released. Even though the official 5% target for 2025 was achieved, the data highlights two trends that are less than ideal:

* **Decelerating Growth:** The quarterly rate cooled to 4.5%, which is the lowest recorded since 2022.
* **Lagging Consumption:** Household spending has, once again, failed to take the lead as the primary growth driver.

#economy #china #markets #growth

Following up on earlier posts: The trading week in Asia-Pacific starts with yet another record high for gold.

#economy #markets #gold #investing #investors

As reported by the @WSJ, economists acknowledge that it is a difficult time for individuals entering the workforce. They can certainly empathize, as young economists are currently navigating the worst job market in recent memory.

The employment landscape for economists is being impacted by a combination of factors. Concerns regarding federal funding have prompted many major universities to decrease or even freeze hiring. Simultaneously, positions within the federal government have become scarce. Even the private sector, which has demonstrated intense demand for economists in recent years, has now scaled back its recruitment efforts.

#economy #economists @WSJ

The EU response to the 10% tariffs announced by the US earlier this weekend precedes what are expected to be high-stakes, intense negotiations.

(In the process, the EU is discovering that US tariff policy is what Game Theorists call "a multi-round game.")

#economy #tariffs #eu #greenland #markets

The EU's response regarding the 10% tariffs announced by the US earlier this weekend arrives ahead of what are anticipated to be intense, high-stakes negotiations.

#economy #tariffs #eu #greenland #markets