Komal Sri-Kumar, president of Sri-Kumar Global Strategies, joins ‘Squawk Box’ to discuss the latest market trends, why he believes the bond market could be having a panic attack, the Fed’s inflation fight, and more. For access to live and exclusive video from CNBC subscribe to CNBC PRO:
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The global bond market experienced a sudden and unexpected “panic attack” in response to the Federal Reserve’s lack of response to interest rate hikes, according to renowned economist Komal Sri-Kumar. This event has led to a renewed focus on the central bank’s actions and their potential impact on the bond market.
Komal Sri-Kumar, president of Sri-Kumar Global Strategies, argues that the bond market’s panic attack is a result of the Federal Reserve’s failure to address rising interest rates earlier. This failure to act in a timely manner shook the confidence of investors and triggered a wave of selling in global bond markets.
In recent years, the Federal Reserve had been raising interest rates to combat inflationary pressures, stimulate economic growth, and normalize monetary policy. Sri-Kumar suggests that the central bank’s gradual and predictable approach provided a sense of reassurance to investors, enabling the bond market to adjust to rising rates without any major disruptions.
However, the sudden shift in market sentiment occurred when the Federal Reserve seemingly disregarded the rising rates, leading to concerns about the central bank’s independence and its ability to effectively manage monetary policy. Investors, unsure of the Fed’s future actions, began selling bonds en masse, causing yields to spike and bond prices to plummet.
According to Sri-Kumar, the panic attack in the bond market serves as a wake-up call for central banks worldwide. He argues that the Federal Reserve needs to communicate clearly and proactively with the market, providing a more transparent roadmap for future policy actions. By doing so, he believes that the bond market can adjust more smoothly to changing interest rate dynamics.
Sri-Kumar warns that the bond market’s reaction to any perceived policy missteps by the Federal Reserve could have significant consequences. As bond yields rise, borrowing costs increase, potentially dampening economic growth and impacting financial markets across the board. Therefore, it is crucial for central banks to carefully manage expectations and maintain open lines of communication to prevent sudden shocks and avoid market panics.
The episode of the bond market’s panic attack emphasizes the crucial role of central banks in maintaining stability and confidence in global financial markets. Investors look to these institutions for guidance and reassurance, and any uncertainty or lack of clarity can have far-reaching consequences.
The Federal Reserve’s recent experience serves as a reminder that monetary policy decisions impact various sectors of the economy, including the sensitive bond market. Investors and analysts alike will be watching closely as central banks navigate the challenges ahead, hoping for a more proactive and transparent approach that helps maintain stability in these turbulent times.
K a m al
CNBC is financially clueless !!
Inflation hits people a lot harder than a crashing stock or housing market as it directly affects people's cost of living that people immediately feel the impact of. It's not surprising negative market sentiment is so high now. We really need help to survive in this Economy. The fin-Markets have underperformed the U.S. economy as fear of inflation hammers the prices of stocks and bonds. . It might sound basic or generic, but getting in touch with a financial adviser was how I was able to outperform the market and raise a profit of $850,000 since June 2022. For me, its the most ideal way to jump into the fin-market these day.
Some weeks ago his top candidate for a crack was commercial real estate. I see he's changed his mind, and this make me question his reliability
The S&P and Dow started going down on the same day! August 1st… apparently Sorkin can't count which is exactly 9 weeks!
Crypto currency is utimately becoming the sure and quick way of making more money by wise individuals who love investing to always increase their wealths. it is no doubt that some few wise individuals are secretly becoming rich without any hard or physical
job by investing in crypto currency and Forex while majority are financially stagnant because they arent exposed to investing. this is the secret between the poor remaining poor and the rich becoming richer without stress.
Do what?
The market trend can turn around very quickly. In fact, the indexes often switch from a bear market to a bull market when the news is at its worst and the mood of investors is at its lowest point. I read an article of people that grossed profits up to $150k during this crash, what are the best stocks to buy now or put on a watchlist?
Democratic congress bankrupting the country.
Hey, you CNBC dip sh–, you should not interrupt your guests what you do not understand! Your guest Mr. Komal Sri-Kumar just the status of the problems and what it would take to bring the change to "good news," but just because you have an expensive salary you lose your manners! Weak man!
I just turned 29 and want to devote myself into becoming a millionaire by 30, I already have £80k saved, £65k lump sum following the death of my father and £15k in personal savings. So far ive come across dropshipping, stocks, and real estate as the most popular means of doing so but i was wondering if any of you guys had any other suggestions, at this stage im just trying to learn about the most viable ways of achieving success within 10 years
There’s no stopping the government from spending
Regardless on how bad the market gets, I still make significant returns, i owe that thanks to the right team, lets keep winning
There seems to be skepticism amongst investors regarding the Federal Reserve's plan to continue increasing interest rates until inflation is stabilized. As for myself, I find myself at a crossroads, uncertain whether to invest $150,000 into my stock portfolio. I'm seeking advice on the best strategy to capitalize on this current market.
Really reading about people making over $250,000 monthly from passive income investments even in this crazy market, any tips and pointers on how to make substantial passive income would be appreciated
Dividends from the stock market encouraged me to begin investing. What matters, in my opinion, is that if you invest and make additional money in addition to dividends, you will be able to live off of dividends without selling. It implies that you can provide that benefit for your children, giving them a head start in life. I've invested more than $600K in dividend stocks throughout the years; I'm currently buying more today and will continue to do so until the price falls even further.
the american stock market might just be the biggest bubble ever. think about it all the 401ks that go into equities bi weekly and they go in there automatically. the people of these 401ks, most don't even know what they're invested in.
Always great to hear from Tim Cooked.
yeah if the fed goes back to zirp and starts qe again inflation is going to blow straight past 10%. mr burns starting easing in the 70's after inflation started to moderate. It then swiftly blew past previous highs.
Y d N
? Afgan
Good news is coming ) buckle up
I remember him saying the 10 yield topped at 4%.
The stock market is significantly overvalued and the only reason is that it's in a lot of people's best interest to keep it high. Did anyone notice that the government restated key financial indicators on Monday for the past three years? Everyone's models should have been updated on lower growth, higher inflation, and a stronger dollar. This is going to be bad.
What about Gold?
Be your own bank with litecoin. Litecoin (LTC) is a digital commodity, not a security, which cannot be debased, censured, seized, frozen, or confiscated. LTC is a decentralized digital payment medium and a store of value without intermediaries such as banks. Litecoin (LTC) complements bitcoin, like silver complemented gold under bimetalic monetary system. Rarity of litecoin means that there will be only 84 million litecoins in existance. As the second oldest coin on the market, litecoin from its inception in 2011 was designed to be the "digital silver" to bitcoin the "digital gold".
Ok
"Something has to break in the system before you get the good news". Excellent point.
Keynesian garbage
the host wants good news when the reality is none out there. Why not make up some false "good news" for him to make him feel good. He doesn't want to listen to the truth from the wise old man.
No panic in the AI sector stocks as tech continues to Rise in Oct…* SOUN… SoundHound.. 42 % Revenue Growth along with 79 % Gross margin in 2nd qt 2023 while adding 3 new recent partnerships. * NVDA.. Nvidia climbing daily…* PLTR… Palantir and others.
The move in Oil, Gold, and Yields is driven by institutional speculators shorting and pumping. Meanwhile the CFTC and SEC are occupied on mean tweets and crippling crypto while the cronies have their fun with futures and options contracts.
We must vote out this administration so that normalcy can return to markets. Derivatives contracts need to be re-examined and the introduction of same-day expiration contracts should be banned.
Hit 100k today. Thank you for all the knowledge you had thrown my way over the last months. Started with 14k in June 2022
Fed and Treasury couldn’t win at the same time of money game.
This clown also claimed that the 10 year would be below 3% by the end of 2023.
Been waiting for komal
What is this guy talking. Chinese bonds are rallying big time. They are in depression.
So we are doomed in the debt cycle .
If you dont give CNBC the answer that fits their narrative, they are rude to the guest.
Have this guy on more often. Clear and concise.
This guy doesnt know what good news is does he? I thought I was a pessimist.
His best case scenario is large scale unemployment and budget deficits getting even bigger. That might help interest rates short term but its gonna send them to the moon over a medium term. That plus the population drop off in ten years. We are staring at double digit bond yields in 8-10 years unless we start cutting and taxing now. The writting is all over the wall.
If America did that we would still remain the worlds Superpower through this century. If not well things are going to get dangerous and very unhinged.
The bond market doesn't have "new information?" You mean other than clarity on the massive debt issuance from the treasury? You mean other than the total and utter gridlock in the House? @3:50 This isn't 2007. The US government and the Fed had rather low debt to GDP back then. They were in a position to rescue and not cause massive inflation. That is not the case now at all. Any attempt to rescue now will cause hyperinflation. Realize that back in late 2008, no one expected the US government to do what it did. Moral hazard was the phrase of the day, week, month, years during and after the GFC. Because no one expected it, the US government could do it. Today everyone expects that it will happen, which is why it cannot happen.
I would bet the big banks are holding piles of chinese realestate debt, that is worth nothing. I would also bet that the hope is regional banks die so they live…