Amr El Sherif

@LizThomasStrat If you use the April 2027 TIP breakeven and compare it to the 1Y inflation swap, the 'dislocation' disappears... You are comparing apples to oranges, benchmarking a 7 months TIP against a 1y swap in a product where seasonality has a huge impact (see my prior comment above)

We're seeing some serious market dislocation on inflation 🚨 1-year Treasury breakevens currently imply 5.2% inflation over the next year. But 1-year inflation swaps are showing just 3.2%. What gives? It comes down to how these two metrics are actually calculated. 🧵👇

@LizThomasStrat You are comparing apples or oranges. The TIP breakeven is 7 months, the swap is 1y. Both are linked to CPI NSA with a 3 months lag. The October TIP will take into consideration US CPI up to July, missing the low H2 readings (see chart). The swap however is for a full year...

@biancoresearch Anybody’s guess 🤷🏽‍♂️ Don’t think even Trump himself has a clue at this stage 😅

TACO-ing or waiting for the Marines to get into position? Regarding "talks are ongoing and, despite erroneous statements ... and others, they are going very well." Six hours ago ... *TRUMP: DON'T KNOW IF WE'RE WILLING TO WORK ON DEAL WITH IRAN

@Brad_Setser *TURKEY SOLD OR SWAPPED 58 TONS OF GOLD IN 2 WEEKS TO MARCH 20 Bloomberg

Lots of hints that Turkey has done a gold swap to raise FX to fund the central bank's intervention to defend the lira. It didn't show up in the CBRT's reserve disclosure for March 19th (reporting is lagged a week). Watch for the disclosure next week (for the CBRT's position as of today)

@dampedspring Sounds like it’s Bob’s article 👀

@dampedspring Weren’t tariffs mostly collected from business? And if so, wouldn’t the refunds be due to companies? I suspect refunds will cause a temporary one-off profit boost to companies that paid IEEPA tariffs since liberation day before Trump finds another way to implement them.

First order. Tariff decision is Pro Growth and Inflationary as it is a reduction in taxes on US people and increases the national debt. (add 125BN in refunds in a year) Second order All TRUMP tariff rebate stimmies disappear as does any room to increase militaty spending. (anti growth and disinlfationary) Third order Trump has less ability to threaten tariffs and get FDI committments. (Anti Growth and disinflationary) Weeds. New Tariffs will be 75% of what was illegal almost immediately and could grind higher.

@expertretar @RenaudFoucart @FT 1. % of GDP doesn’t mean per capita 2. This is a chart of NIIP not exports or imports 3. Even if it were exports or imports you would still want to divide by GDP for a cross country comparison as this would represent the indicators relative to the size of the respective economies

@aeelsherif @RenaudFoucart @FT No it shouldn't. When a leader in the EU looks to export more, why would he care that X-country imports a lot per capita? Total is the important thing.

Love this figure from the @FT The world is composed of 192 countries lending money to the US, and of the US buying stuff with it.

LIVE: from the World Economic Forum • EN DIRECT : au Forum économique mondial x.com/i/broadcasts/1…

@elonmusk He’s a dictator sending a not so veiled message to his own people against the consequences of revolting and civil war. His message has a lot more to do with securing his own seat through fear mongering and a lot less to do with the Somali situation.

What he said …

@BillAckman @shaig Successful genocide, well done 👏🏽

@shaig Woo hoo. And the shekel has strengthened.

@elonmuskADO y = x^2 - 1 y = 7^2 - 1 = 48

@Pac_Doesnt @jasonfurman The vastly different migration policies under Trump vs Biden means NFP is much less relevant and the UE rate is the key figure in assessing the health of the labour market. Unemployment indicates a modestly slowing labour market but not as alarming as headline NFPs would suggest

@jasonfurman Since WHEN is 119k remotely “strong”? What sort of curve is Trump being graded on? He has 573,000 jobs created his first 8 months combined Biden had seven MONTHS in excess of that

A weakish jobs report but, as usual, not completely clear. Surprisingly strong 119K jobs added but 3-month average is only 62K. Unemployment rate up 0.12pp to 4.4% but LFPR and employment rate up and U-6 (broadest measure) down. Average hours flat.

@dampedspring Do you think there is a possibility he would nominate Miran?

As my favorite picks for the good of the country in the short list for Fed chairman are Best choice - Waller Second best - Bowman Distant third - Reider Miles back - Warsh Absolute disaster - Hassett I congratulate Hassett as our new Fed chairman

@AndreasSteno Do everyone a favour. Delete this post and go do your research, you are usually good at it Also don’t conflate Macabai Tel Aviv supporters with Jews. They might all be Jews but not all Jews are Macabi supporters Just like not all Jews are Israelis. And not all Jews are Zionists

Really?! Less than 48 hours after refusing Jews access to a match next week? Pathetic.

@Brad_Setser @sobel_mark Hi Brad, do you have a substack?

my bottom line is simple -- in eliminating reported errors in its balance of payments data, China introduced large errors into its much more important reported current account surplus. The net result is worse data ... the IMF needs to be on top of this! @sobel_mark /end

One of the (many) annoying things about China's new (after 2021) balance of payments data is that the adjustment relative to the underlying customs and services data isn't constant. The q2 reported surplus even tho the underlying customs data showed a bigger surplus 1/many

@BittelJulien I think you are mixing up peak activity with ‘late cycle’. Yes, we are past peak levels of activity right now as employment and growth slow significantly. That’s late cycle morphing into recession…

I’ve been seeing a lot of chatter on X about “peak cycle” and how the economy looks late-cycle. So I wanted to tackle this head on and share a few thoughts of my own... This is from the August 21st MIT publication: A classic late-cycle economy typically has all the following ingredients:   ✅ Manufacturing sentiment is extreme (think ISM ~60) ✅ Services sentiment is extreme ✅ Homebuilder sentiment is extreme ✅ Consumer confidence is high ✅ Worker confidence is high (JOLTS quits rate rising sharply) ✅ Investor sentiment is very bullish ✅ Small business confidence is high ✅ Job openings and hiring plans are rising ✅ Wage data and surveys show accelerating pay increases ✅ CEO confidence is strong and capex is booming Now, I could add more to this, but when you score all of these inputs and turn them into a single timeseries, here’s what you get (chart 1). Using data from ISM, NAHB, NFIB, BLS, AAII, The Conference Board, etc., US sentiment, when viewed as a complete picture, remains very subdued. We’re just not even close to the euphoric levels we see late in the business cycle, when everything listed above is stretched to extremes. Peak cycle is when the ISM rolls over from 60+ to sub-50, inventories unwind, and demand cools. Supply and demand reset, inflation pressures ease, and the cycle eventually recovers out of the slowdown or recession – mostly depending on the extent to which financial conditions tightened during the cycle, particularly late on as central banks hike rates and drain liquidity. However, based on this full set of indicators, the data is pointing to something very different. This does not look like an above-trend late-cycle economy. It looks much more like an early-cycle economy trying to build momentum. Another really important factor, and a key reason we believe both the ISM and this sentiment composite will grind higher this year and into 2026, is the sheer scale of central bank easing via rate cuts. Right now, nearly 90% of central banks are cutting rates. That is extraordinary, and on a forward-looking basis, it is a massive tailwind for the business cycle (chart 2).   By my playbook, the time to start talking late-cycle is when the teal line rolls over and begins to drop, as central banks turn to hiking rates to slow growth. Even then, there’s usually a nine-month lag before higher rates hit the real economy. Right now, we’re just nowhere near that... in fact, the opposite is true. To my earlier point, slowdown or recession is largely a function of how much financial conditions tighten late in the cycle. Oil prices are a big part of this equation. When oil runs 50% above trend, that represents a massive tightening and has almost always signaled recession, looking back to the early 1970s. However, right now, we are nearly 20% below trend and still falling, which shows this component of financial conditions is still easing (chart 3). Also, as I’ve pointed out many times in previous reports, when you look at Temporary Help Services, it has early-cycle vibes written all over it (chart 4). Rising growth from deeply negative levels is an early-cycle dynamic. It tells you the economy is in recovery mode, not rolling over. Late-cycle is the opposite: positive year-on-year growth that’s slowing, which reflects an overheated economy losing steam. Why is unemployment still rising? Because it lags the cycle. Jobs data is a six-month look in the rear-view mirror. Here’s the thing: full-time hires are expensive. Benefits, pensions, overhead… So what do businesses do first? They typically increase overtime hours and bring in temp workers. Only when they feel confident do they finally lock in full-time staff. That way, they can scale without locking themselves into long-term payroll commitments. So, this isn’t late-cycle. It’s early-cycle (growth up + inflation down = Macro Spring), soon transitioning to mid-cycle (growth up + inflation up = Macro Summer). That’s how I see it, anyway...

Powell without the courage to stand against political pressure. Someone needs to tell the FOMC the "commitment" to a 2% mandate lacks any credibility when inflation has been above it for 52m and the Fed signals rate cuts as inflation rises and the economy is at full employment.

@jasonfurman breaks it down best. The main signal from the combined Q1+Q2 is weak private consumption. The prognosis is not great either with tariffs set to knock off ~1.5pp of GDP. Knock on impact on earnings suggests equity investors are too complacent at current levels.

@AndreasSteno Another reason to be bullish USD

HASSETT: WE AT THE WHITE HOUSE 100% RESPECT FED INDEPENDENCE New tones all over. Is it because they have gotten clues that they are willing to cut or what is going on?