Latest news with #TorstenSløk
Yahoo
24-05-2025
- Business
- Yahoo
A top Wall Street economist says the bond market is signaling a dire scenario for the economy is in sight
Torsten Sløk, the chief economist of Apollo, thinks stagflation is coming for the US. That's a dreaded scenario where the economy slows while inflation remains high. Sløk pointed to the bond market, which appears to be pricing in higher inflation and weaker growth. A top Wall Street economist says the bond market is sending a dire warning about what could be ahead for the US economy. Torsten Sløk, the chief economist of Apollo Global Management, said he believes the recent spike in bond yields is signaling that the economy could be headed for a period of stagflation. It's an economic scenario that hobbled the US economy in the 1970s, and it entails a slowdown in economic growth while inflation remains stubbornly high. It's widely considered to be even harder for monetary policymakers to tackle than a typical recession, as central bank officials can't lower interest rates to boost growth out of fear of stoking more inflation. "This is essentially stagflation," Sløk said about what yields are implying about the US economic outlook "By definition, tariffs mean higher inflation, and it means lower growth," he told CNBC on Friday. Bond yields have been rising this year, but the move higher has accelerated in recent weeks. It has been driven partly by concerns about the US budget deficit, and partly by fears that President Donald Trump's tariffs will raise prices, leading to higher interest rates in the economy. The yield on the 10-year US Treasury spiked as high as 4.61% this week, up 63 basis points from lows in early April. This embedded content is not available in your region. The 10-year yield is trading within the range that implies some market participants are pricing in a recession with a stagflation scenario, Naomi Fink, chief global strategist at Nikko Asset Management, wrote in a note this week. The yield on the 2-year US Treasury was about 3.96% on Friday, down 28 basis points from the start of the year. That can be a sign that investors expect the economy to weaken over the near term, which would prompt lower interest rates. Consensus expectations for US economic growth have already started to trend downward, while inflation expectations have climbed, Sløk said in a note to clients this month. Stagflation concerns have been creeping back into the mix of Wall Street commentary as traders turn their attention away from trade deals and eye the longer-run impact of tariffs. JPMorgan boss Jamie Dimon said he believed the economy was still at risk of stagflation this week, though he wasn't necessarily forecasting the scenario. "I think global fiscal deficits are inflationary. I think the remilitarization of the world is inflationary. The restructuring of trade is inflationary," he said, speaking to Bloomberg on Thursday. Nobel laureate Paul Krugman said that he believed price increases stemming from tariffs could come "within weeks," and that the economy was poised to slow. "The inflationary impact of tariffs is coming," the top economist said in a televised interview this week. "Certainly an economic slowdown. Certainly a bump up in the inflation rate. It's stagflation. Maybe it's stagflation-lite, but we're definitely heading for some kind of stagflation." Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
24-05-2025
- Business
- Yahoo
A top Wall Street economist says the bond market is signaling a dire scenario for the economy is in sight
Torsten Sløk, the chief economist of Apollo, thinks stagflation is coming for the US. That's a dreaded scenario where the economy slows while inflation remains high. Sløk pointed to the bond market, which appears to be pricing in higher inflation and weaker growth. A top Wall Street economist says the bond market is sending a dire warning about what could be ahead for the US economy. Torsten Sløk, the chief economist of Apollo Global Management, said he believes the recent spike in bond yields is signaling that the economy could be headed for a period of stagflation. It's an economic scenario that hobbled the US economy in the 1970s, and it entails a slowdown in economic growth while inflation remains stubbornly high. It's widely considered to be even harder for monetary policymakers to tackle than a typical recession, as central bank officials can't lower interest rates to boost growth out of fear of stoking more inflation. "This is essentially stagflation," Sløk said about what yields are implying about the US economic outlook "By definition, tariffs mean higher inflation, and it means lower growth," he told CNBC on Friday. Bond yields have been rising this year, but the move higher has accelerated in recent weeks. It has been driven partly by concerns about the US budget deficit, and partly by fears that President Donald Trump's tariffs will raise prices, leading to higher interest rates in the economy. The yield on the 10-year US Treasury spiked as high as 4.61% this week, up 63 basis points from lows in early April. This embedded content is not available in your region. The 10-year yield is trading within the range that implies some market participants are pricing in a recession with a stagflation scenario, Naomi Fink, chief global strategist at Nikko Asset Management, wrote in a note this week. The yield on the 2-year US Treasury was about 3.96% on Friday, down 28 basis points from the start of the year. That can be a sign that investors expect the economy to weaken over the near term, which would prompt lower interest rates. Consensus expectations for US economic growth have already started to trend downward, while inflation expectations have climbed, Sløk said in a note to clients this month. Stagflation concerns have been creeping back into the mix of Wall Street commentary as traders turn their attention away from trade deals and eye the longer-run impact of tariffs. JPMorgan boss Jamie Dimon said he believed the economy was still at risk of stagflation this week, though he wasn't necessarily forecasting the scenario. "I think global fiscal deficits are inflationary. I think the remilitarization of the world is inflationary. The restructuring of trade is inflationary," he said, speaking to Bloomberg on Thursday. Nobel laureate Paul Krugman said that he believed price increases stemming from tariffs could come "within weeks," and that the economy was poised to slow. "The inflationary impact of tariffs is coming," the top economist said in a televised interview this week. "Certainly an economic slowdown. Certainly a bump up in the inflation rate. It's stagflation. Maybe it's stagflation-lite, but we're definitely heading for some kind of stagflation." Read the original article on Business Insider Sign in to access your portfolio
Business Insider
24-05-2025
- Business
- Business Insider
A top Wall Street economist says the bond market is signaling a dire scenario for the economy is in sight
A top Wall Street economist says the bond market is sending a dire warning about what could be ahead for the US economy. Torsten Sløk, the chief economist of Apollo Global Management, said he believes the recent spike in bond yields is signaling that the economy could be headed for a period of stagflation. It's an economic scenario that hobbled the US economy in the 1970s, and it entails a slowdown in economic growth while inflation remains stubbornly high. It's widely considered to be even harder for monetary policymakers to tackle than a typical recession, as central bank officials can't lower interest rates to boost growth out of fear of stoking more inflation. "This is essentially stagflation," Sløk said about what yields are implying about the US economic outlook "By definition, tariffs mean higher inflation, and it means lower growth," he told CNBC on Friday. Bond yields have been rising this year, but the move higher has accelerated in recent weeks. It has been driven partly by concerns about the US budget deficit, and partly by fears that President Donald Trump's tariffs will raise prices, leading to higher interest rates in the economy. The yield on the 10-year US Treasury spiked as high as 4.61% this week, up 63 basis points from lows in early April. The 10-year yield is trading within the range that implies some market participants are pricing in a recession with a stagflation scenario, Naomi Fink, chief global strategist at Nikko Asset Management, wrote in a note this week. The yield on the 2-year US Treasury was about 3.96% on Friday, down 28 basis points from the start of the year. That can be a sign that investors expect the economy to weaken over the near term, which would prompt lower interest rates. Consensus expectations for US economic growth have already started to trend downward, while inflation expectations have climbed, Sløk said in a note to clients this month. Stagflation concerns have been creeping back into the mix of Wall Street commentary as traders turn their attention away from trade deals and eye the longer-run impact of tariffs. JPMorgan boss Jamie Dimon said he believed the economy was still at risk of stagflation this week, though he wasn't necessarily forecasting the scenario. "I think global fiscal deficits are inflationary. I think the remilitarization of the world is inflationary. The restructuring of trade is inflationary," he said, speaking to Bloomberg on Thursday. Nobel laureate Paul Krugman said that he believed price increases stemming from tariffs could come "within weeks," and that the economy was poised to slow. "The inflationary impact of tariffs is coming," the top economist said in a televised interview this week. "Certainly an economic slowdown. Certainly a bump up in the inflation rate. It's stagflation. Maybe it's stagflation-lite, but we're definitely heading for some kind of stagflation."
Yahoo
23-05-2025
- Business
- Yahoo
A slowdown in tariff-fueled spending may be the next stumbling block for the US economy
Tariff jitters caused US consumers to unleash a burst of spending, but that's winding down. Consumer spending has been flat in May, Bank of America credit card data shows. Forecasters say slower spending is another factor boosting the odds of a recession in 2025. Fears of higher prices caused by President Donald Trump's tariffs unleashed a burst of spending earlier in the year, but that's winding down—and the forecaster for shoppers to turn thrifty could weigh on the economy in the coming months. Retail sales rose 0.1% in April, down from the prior month's 1.7% increase. Credit and debit card users look like they've been slowing their spending since late April, Bank of America said. Card spending eased from 1.1% year-over-year growth in March to 1% year-over-year growth in the back half of April. And over the first two weeks of May, spending growth has been flat with no year-over-year increase, the bank said in a note on Thursday. "Given that economic uncertainty remains very high amid the imposition of tariffs and corresponding price increases, we continue to keep a close eye on how the consumer is reacting," the bank's economists wrote, adding that they believe the trend of consumers buying ahead of tariffs had "largely run its course." Forecasters say that a weaker consumer could be a major pain point in the US economy in the months ahead. Consumer spending makes up over two-thirds of GDP, and has helped prop up growth in recent years. Torsten Sløk, the chief economist at Apollo Global Management, said that a weaker consumer was among the top 10 risks he sees weighing on the US economic outlook. "Retailers are saying prices will be moving higher over the coming quarters. That's what everyone expects," Sløk told Bloomberg on Tuesday. He added that higher prices could cause the Fed to keep interest rates higher for longer as the central bank keeps an eye on inflation. "But if growth is weakening — that is the expectation from the consensus. That's what we're seeing in the data. Then you will have this stagflation situation," he said, referring to a scenario where growth slows while inflation remains high. Doug Ramsey, the CIO of The Leuthold Group, said this week that he sees the risk of a "self-fulfilling confidence collapse" in the US. He pointed to weakened consumer sentiment indicators, like higher expectations for inflation and unemployment in the next year. Consumer expectations make up a big chunk of the economic outlook and could weigh on GDP if consumers pull back from spending. Excluding other factors, the decline in consumer expectations alone in recent months could cause real GDP growth to fall from about 3% to "essentially zero," he estimated. "It's an outcome that would not merely be self-fulfilling, but self-inflicted as well," Ramsey wrote of a potential downturn. Pantheon Macroeconomics said it believes a slowdown in consumption could cause the economy to enter a period of "stagnation," though the US will likely avoid a recession. Businesses, meanwhile, are already expecting consumer demand to slow and have pulled back on hiring. Pantheon pointed to lower hiring intentions in the Fed's regional surveys and higher-than-expected continuing jobless claims in the last week. "A large share of these jobs likely will go as consumers' spending swings from above-trend to below-trend in Q3, after tariff-driven price rises have kicked in. Accordingly, we continue to think that the pace of firing will rise and new hiring will decline," Samuel Tombs, the chief US economist at Pantheon, wrote in a note on Thursday. Forecasters have adjusted their outlooks since the US and China toned down trade tensions, and many analysts think the economy can avoid a recession in 2025. Goldman Sachs lowered its 12-month recession forecast from 45% to 35%. JPMorgan said it believed the risk of recession had dropped below 50%, but remained elevated. Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
23-05-2025
- Business
- Yahoo
A slowdown in tariff-fueled spending may be the next stumbling block for the US economy
Tariff jitters caused US consumers to unleash a burst of spending, but that's winding down. Consumer spending has been flat in May, Bank of America credit card data shows. Forecasters say slower spending is another factor boosting the odds of a recession in 2025. Fears of higher prices caused by President Donald Trump's tariffs unleashed a burst of spending earlier in the year, but that's winding down—and the forecaster for shoppers to turn thrifty could weigh on the economy in the coming months. Retail sales rose 0.1% in April, down from the prior month's 1.7% increase. Credit and debit card users look like they've been slowing their spending since late April, Bank of America said. Card spending eased from 1.1% year-over-year growth in March to 1% year-over-year growth in the back half of April. And over the first two weeks of May, spending growth has been flat with no year-over-year increase, the bank said in a note on Thursday. "Given that economic uncertainty remains very high amid the imposition of tariffs and corresponding price increases, we continue to keep a close eye on how the consumer is reacting," the bank's economists wrote, adding that they believe the trend of consumers buying ahead of tariffs had "largely run its course." Forecasters say that a weaker consumer could be a major pain point in the US economy in the months ahead. Consumer spending makes up over two-thirds of GDP, and has helped prop up growth in recent years. Torsten Sløk, the chief economist at Apollo Global Management, said that a weaker consumer was among the top 10 risks he sees weighing on the US economic outlook. "Retailers are saying prices will be moving higher over the coming quarters. That's what everyone expects," Sløk told Bloomberg on Tuesday. He added that higher prices could cause the Fed to keep interest rates higher for longer as the central bank keeps an eye on inflation. "But if growth is weakening — that is the expectation from the consensus. That's what we're seeing in the data. Then you will have this stagflation situation," he said, referring to a scenario where growth slows while inflation remains high. Doug Ramsey, the CIO of The Leuthold Group, said this week that he sees the risk of a "self-fulfilling confidence collapse" in the US. He pointed to weakened consumer sentiment indicators, like higher expectations for inflation and unemployment in the next year. Consumer expectations make up a big chunk of the economic outlook and could weigh on GDP if consumers pull back from spending. Excluding other factors, the decline in consumer expectations alone in recent months could cause real GDP growth to fall from about 3% to "essentially zero," he estimated. "It's an outcome that would not merely be self-fulfilling, but self-inflicted as well," Ramsey wrote of a potential downturn. Pantheon Macroeconomics said it believes a slowdown in consumption could cause the economy to enter a period of "stagnation," though the US will likely avoid a recession. Businesses, meanwhile, are already expecting consumer demand to slow and have pulled back on hiring. Pantheon pointed to lower hiring intentions in the Fed's regional surveys and higher-than-expected continuing jobless claims in the last week. "A large share of these jobs likely will go as consumers' spending swings from above-trend to below-trend in Q3, after tariff-driven price rises have kicked in. Accordingly, we continue to think that the pace of firing will rise and new hiring will decline," Samuel Tombs, the chief US economist at Pantheon, wrote in a note on Thursday. Forecasters have adjusted their outlooks since the US and China toned down trade tensions, and many analysts think the economy can avoid a recession in 2025. Goldman Sachs lowered its 12-month recession forecast from 45% to 35%. JPMorgan said it believed the risk of recession had dropped below 50%, but remained elevated. Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
