@ericwallerstein

Chief Macro Strategist, Clocktower Group. formerly at the Fed and White House.

 Santa Monica, CA
substack.com/@ericwallerstein
Joined March 2020
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2.6KMedia
Meta spending a cool 2.5% of GDP on off-balance sheet AI infrastructure. roughly double the European Union’s total defense spending
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From Zurich, with Love… 📬
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when’s the last time you saw a “inflation comes in cooler than expected” headline?
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interesting research on the Canadian carry trade. my main takeaways: 1) underscores the deteriorating US external position and relationship between strong FX and negative NIIP 2) important for allocators in surplus countries worried about an equity market drawdown or weak USD
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corollary for asia: given the strength of Japan’s income-driven CA surplus, plus substantial NIIP, this supports the idea that consumption and domestic demand can rise quicker without generating much (if any) macro fundamental risk. bankofcanada.ca/wp-content/u…
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Canada core CPI is below 2.0% and showing no signs of accelerating. Yet hawkish comments from Gov Macklem boosted market pricing for October up from 8bps to 21bps. I’m not sure why you’d hike rates in an economy with no growth and tradable sectors under threat.
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amazing meeting, lovely guy!
Ozan Korman Tarman
@ozanktarmanOct 19
Beginning, continuation of a beautiful friendship! Enjoyed the coffee, dear @ericwallerstein Thanks for coming by!
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📬🥟
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one of the stupider things i’ve ever read
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i should be white house press secretary
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if AI truly wobbles i wonder if 30y asw tighten back toward -80 (if not lower)
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you genuinely hate to see it.
Eric Wallerstein
@ericwallersteinJul 27
I thought Indonesia would be an EM success story coming out of the Iran war—terms of trade shock could have been positive in the intermediate term, and a lot of political risk premium was already priced in. Now the President’s nephew runs the central bank. Fiscal dominance is the law of the land. Indonesia will be likely be downgraded to a frontier market fairly soon; the capital flight will be immense. USDIDR could reach 20,000 in 12m.
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great long once it becomes frontier though
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Treasury curve and front-end reaction to PPI and retail sales does comport with the top in yields—even 1y1y has rolled over 20bps. I buy flatter-for-longer, and that the Fed will be forced to be too restrictive, but not necessarily that bonds will continue to rally on hot data.
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Eric Wallerstein retweeted
Bob Elliott
@BobEUnlimitedOct 15
The Consumer Just Can’t Keep Up Unlike earlier in the year when consumers surged spending to keep up with rising gas prices, spending has not kept up with the second surge in prices this fall. h/t @ericwallerstein bobeunlimited.substack.com/p…
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Central bankers are largely price takers these days, not price makers. Much more interesting to hear from a finance minister than a central bank governor.
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“that sounds like fiscal dominance eric” sure i don’t care what you call it. too often nomenclature becomes the subject of discussion rather than the issue at hand.
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Street seems broadly optimistic that dollar/UST would hedge a bear market
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Williams and Goolsbee both see the nominal neutral rate at 3%. I wonder how they’re going to communicate the fact that they’ll be hiking to 5% next year.
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not sure i even disagree with them tbf
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