Economist Mohamed El-Erian on Fed confidence and dollar concerns

요약 보기

기업 실적과 일부 대형주 강세로 시장이 경제 펀더멘털보다 강하게 움직이나, 경기 둔화 시 충돌 위험이 있다. 연준 성장률 전망 하향(1.7→1.4)은 아직 기업부문에 충분하나 1% 미만이면 시장 영향이 커질 것. 밸류에이션은 높고 기술적 수급이 우위지만, 연준 독립성 우려와 정치적 압력으로 통화정책이 과도하게 긴축적으로 유지될 위험이 있다.

다듬은 글

※ 자동 자막 원문(다듬기 전)

01. The US dollar is falling amid concerns over the independence of the Federal Reserve. The Wall Street Journal says President Trump could name a replacement for Jay Powell well before his term is up, Jay Powell's not the president's. Mr. Trump apparently has repeatedly criticized Powell for not lowering rates.

02. There you see the the way the currencies have moved. Mohamed El-Erian is the president of Queens College at Cambridge University. He joins me. Gosh, there is too much for us to talk about tonight. We shall we shall tackle it head on. First and foremost, what is driving this market higher in seeming against the headwinds of mediocre numbers and now the questions of perhaps a shadow Fed?

03. So you would have heard the saying the market is in the economy and the economy isn't the market. So market participants are focusing on the health of the corporate sector and a handful of companies in particular that are going from strength to strength. They are also making a very interesting distinction between corporate US where where there is enormous trust and sovereign US where where is concern about the dollar and there's concern about US Treasuries.

04. The markets are not the economy and vice versa, but at some point they coalesce or collide and I'm guessing that's the issue that the the the the the if you will the hangover of the market. Correct. They will collide if the economy slips into recession. The Fed just lowered its growth projections from 1.7 to 1.4.

05. 1.4 is good enough for the corporate sector. If however we get below 1 then you will start hearing that the economy can have and will have an impact on the market. So that that why I got this feeling? You know, that that that that there's something rotten out there. That there's something waiting to go wrong.

06. That the market is overvalued, not justified on its current fundamentals, and therefore the smart money like Buffett a few months ago got out. Correct. And you know, there are three drivers. Um and right now two are telling you to be careful. One is telling you stay in there. The first one that's telling you that to be careful is fundamentals.

07. The economy is not weak, but it is weakening. The second thing that's telling you to be careful is the valuations levels. They are high. However, technicals, the willingness of people to put money in the market cuz they're not sure where else to go, is proving to be stronger than the first two. And we often are in phases which where these technicals can take control of a market for a while.

08. Ultimately, fundamentals assert themselves, valuations assert themselves. That can take time. Where do you stand on this debate within the Fed? I mean, uh Chair Powell will not or does not want to find himself on the wrong side of his own FOMC. But with two members now breaking ranks, the chair still saying no no good reason to cut rates just yet.

09. Where do you stand? So, I'll answer the policy question in a minute, but I am very worried about the politics. So, first you mentioned two with publican leaning central bankers who suddenly almost out of nowhere want July to be live. Want the Fed to consider a cut in July. That came out of nowhere. And people say asking is is that political?

10. Second, you mentioned it, the possibility that President Trump appoints a Fed shadow chair, which undermines the authority of the current chair. And then, linking to policy, there's the concern that Chair Powell himself is now playing politics. That he wants to go down as the central banker who defended Fed independence and doesn't want to be seen cutting weights because of pressure from President Trump.

11. So, the risk here is that monetary policy will stay too tight for too long, Richard. It's just impossible. I look I look I wish we were back to the old days, "Sell in May and go away." I mean, no one can go on holiday at the moment with any What what I I remember your advice at the beginning of the the last crisis, which is don't take any irrevocable decision.

12. Don't do anything that you could live to regret that you can't put right. That still is good advice, but I suggest it's become harder when valuations I mean, you want one wants to be in this market. Yeah, and and and and many are. I understand, you know, when the trend is your friend and other things.

13. The market has been conditioned to fade any geopolitical shock, and it did. It bounced back so quickly from Israel's attack on Iran at a speed that no one expected, but it did. It bounced straight back up. Let alone how quickly we've bounced back from what you were talking with Hannah, which is, of course, the Liberation Day announcement.

14. This market it has very favorable technicals for now. And on that note, we'll say thank you, sir, and wish you a good weekend when we finally get there and a good holiday when you finally take one. Thank you, Mohamed El-Erian.