The pendulum of market sentiment swings dramatically. It has swung from nearly everyone and their sister complaining that the Federal Reserve was lagging…
The pendulum of market sentiment swings dramatically. It has swung from nearly everyone and their sister complaining that the Federal Reserve was lagging behind the surge in prices to fear of a recession. On June 15, at the conclusion of the last FOMC meeting, the swaps market priced in a 4.60% terminal Fed funds rate. That seemed like a stretch, given the headwinds the economy faces that include fiscal policy and an energy and food price shock on top of monetary policy tightening. It is now seen closer to 3.5%. It is lower now than it was on when the FOMC meeting concluded on May 4 with a 50 bp hike.
In addition to the tightening of monetary policy and the roughly halving of the federal budget deficit, the inventory cycle, we argued was mature and would not be the tailwind it was in Q4. While we recognized that the labor market was strong, with around 2.3 mln jobs created in the first five month, we noted the four-week moving average of weekly jobless claims have been rising for more than two months. In the week to June 17, the four-week moving average stood at 223k. It is a 30% increase from the lows seen in April. It is approaching the four-week average at the end of 2019 (238k), which itself was a two-year high. In addition, we saw late-cycle behavior with households borrowing from the past (drawing down savings and monetizing their house appreciation) and from the future (record credit card use in March and April).
The Fed funds futures strip now sees the Fed's rate cycle ending in late Q1 23 or early Q2 23. A cut is being priced into the last few months of next year. This has knock-on effects on the dollar. We suspect it is an important part of the process that forms a dollar peak. There is still more wood to chop, as they say, and a constructive news stream from Europe and Japan is still lacking. The sharp decline in Russian gas exports to Europe is purposely precipitating a crisis that Germany's Green Economic Minister, who reluctantly agreed to boost the use of coal (though not yet extend the life of Germany's remaining nuclear plants that are to go offline at the end of the year), warns could spark a Lehman-like event in the gas sector.
At the low point last week, the US 10-year yield had declined by around 50 bp from the peak the day before the Fed delivered its 75 bp hike. This eases a key pressure on the yen, and, at the same time, gives the BOJ some breathing space for the 0.25% cap on its 10-year bond. A former Ministry of Finance official cited the possibility of unilateral intervention. While we recognize this as another step up the intervention escalation ladder, it may not be credible. First, it was a former official. It would be considerably more important if it were a current official. Second, by raising the possibility, it allowed some short-covering of the yen, which reduces the lopsided positioning and reduces the impact of intervention. Third, on the margin, it undermines the surprise-value.
Ultimately, the decline in the yen reflects fundamental considerations. The widening of the divergence of monetary policy is not just that other G10 countries are tightening, but also that Japan is easing policy. A couple of weeks ago, to defend its yield-curve-control, the BOJ bought around $80 bln in government bonds. The odds of a successful intervention, besides the headline impact, is thought to be enhanced if it signals a change in policy and/or if it is coordinated (multilateral).
There are a few high frequency data points that will grab attention in the coming days, but they are unlikely to shape the contours of the investment and business climate. The key drivers are the pace that financial conditions are tightening, the extent that China's zero-Covid policy is disrupting its economy and global supply chains, and the uncertainty around where inflation will peak.
Most of the high frequency data, like China's PMI and Japan's industrial production report and the quarterly Tankan survey results, and May US data are about fine-tuning the understanding of Q2 economic activity and the momentum at going into Q3. They pose headline risk, perhaps, but may be of little consequence. It is all about the inflation and inflation expectations: except in Japan. Tokyo's May CPI, released a few weeks before the national figures, is most unlikely to persuade the Bank of Japan that the rise in inflation will not be temporary.
With fear of recession giving inflation a run for its money in terms of market angst, the dollar may be vulnerable to disappointing real sector data, though the disappointing preliminary PMI likely stole some thunder. The Atlanta Fed's GDPNow says the US economy has stagnated in Q2, but this is not representative of expectations. It does not mean it is wrong, but it is notable that the median in Bloomberg's survey is that the US economy is expanding by 3% at an annualized rate. This seems as optimistic as the Atlanta Fed model is pessimistic. May consumption and income figures will help fine-tune GDP forecasts, but the deflator may lose some appeal. Even though the Fed targets the headline PCE deflator, Powell cited the CPI as the switch from 50 to 75 bp hike.
In that light, the preliminary estimate of the eurozone's June CPI that comes at the end of next week might be the most important economic data point. It comes ahead of the July 21 ECB meeting for which the first rate hike in 11 years has been all but promised. Although ECB President Lagarde had seemed to make clear a 25 bp initial move was appropriate, the market thinks the hawks may continue to press and have about a 1-in-3 chance of a 50 bp move. The risk of inflation is still on the upside and Lagarde has mentioned the higher wage settlements in Q2. That said, the investors are becoming more concerned about a recession and expectations for the year-end policy rate have fallen by 30 bp (to about 0.90%) since mid-June.
A couple of days before the CPI release the ECB hosts a conference on central banking in Sintra (June 27-June 29). The topic of this year's event is "Challenges for monetary policy in a rapidly changing world," which seems apropos for almost any year. The conventional narrative places much of the responsibility of the high inflation on central banks. It is not so much the dramatic reaction to the Pandemic as being too slow to pullback. In the US, some argue that the fiscal stimulus aggravated price pressures. On the face of it, the difference in fiscal policy between the US and the eurozone, for example, may not explain the difference between the US May CPI of 8.6% year-over-year and EMU's 8.1% increase, or Canada's 7.7% rise, or the UK's 9.1% pace.
There is a case to be made that we are still too close to the pandemic to put the experience in a broader context. This may also be true because the effects are still rippling through the economies. In the big picture, central banks, leaving aside the BOJ, appear to have responded quicker this time than after the Great Financial Crisis in pulling back on the throttle, even if they could have acted sooner. Some of the price pressures may be a result of some of the changes wrought by the virus. For example, a recent research paper found that over half of the nearly 24% rise in US house prices since the end of 2019 can be explained by the shift to working remotely, for example.
The rise in gasoline prices in the US reflect not only the rise in oil prices, but also the loss of refining capacity. The pandemic disruptions saw around 500k barrels a day of refining capacity shutdown. Another roughly 500k of day of refining capacity shifted to biofuels. ESG considerations, and pressure on shale producers to boost returns to shareholders after years of disappointment have also discouraged investment into the sector. The surge in commodity prices from energy and metals to semiconductors to lumber are difficult to link to monetary or fiscal policies.
Such an explanation would also suggest that contrary to some suggestions, the US is not exporting inflation. Instead, most countries are wrestling with similar supply-driven challenges and disruptions. That said, consider that US core CPI has risen 6% in the year through May, while the ECB's core rate is up 3.8%, and rising. The US core rate has fallen for two months after peaking at 6.5%. The UK's core CPI was up 5.9% in May, its first slowing (from 6.2%) since last September. Japan's CPI stood at 2.5% in May, but the measure excluding fresh food and energy has risen a benign 0.8% over the past 12 months.
Consider Sweden. The Riksbank meets on June 30. May CPI accelerated to 7.3% year-over-year. The underlying rate, which uses a fixed interested rate, and is the rate the central bank has targeted for five years is at 7.2%. The underlying rate excluding energy is still up 5.4% year-over-year, more than doubling since January. The policy rate sits at 0.25%, having been hiked from zero in April. The economy is strong. The May composite PMI was a robust 64.4. The economy appears to be growing around a 3% year-over-year clip. Unemployment, however, remains elevated at 8.5%, up from 6.4% at the end of last year. The swaps market has a 50 bp hike fully discounted and about a 1-in-3 chance of a 75 bp hike. The next Riksbank meeting is not until September 20, and the market is getting close to pricing in a 100 bp hike. Year-to-date, the krona has depreciated 11% against the dollar and about 3% against the euro.
In addition to macroeconomic developments, geopolitics gets the limelight in the coming days. The G7 summit is June 26-28. Coordinating sanctions on Russia will likely dominate the agenda and as the low-hanging fruit has been picked, it will be increasingly challenging to extend them to new areas.
At least two important issues will go unspoken and they arise from domestic US political considerations. Although President Biden has recommended a three-month gas tax holiday, he needs Congress to do it. That is unlikely. Inflation, and in particular gasoline prices are a critical drag on the administration and the Democrats more broadly, who look set to lose both houses. And the Senate and Congressional Republicans are not inclined to soften the blow. Talk of renewing an export ban on gasoline and/oil appears to be picking up. The American president has more discretion here. This type of protectionism needs to be resisted because could it be a slippery slope.
The other issue is the global corporate tax reform. Although many countries, most recently Poland, have been won over, it looks increasingly likely that the US Senate will not approve it. Biden and Yellen championed it, but the votes are not there now, and it seems even less likely they will be there in the next two years. The particulars are new, but the pattern is not. The US has not ratified the Law of the Seas nor is it a member of the International Court of Justice. Some push back and say that the US acts as if it were. That argument will be less persuasive on the corporate tax reform.
NATO meets on June 29-30. For the first time, Japan, Australia, New Zealand, and South Korea will be attending. Clearly, the signal is that Russia's invasion of Ukraine is not distracting from China. Most recently, China pressed its case that the Taiwan Strait is not international waters. Some in Europe, including France, do not want to dilute NATO's mission by extending its core interest to the Asia Pacific area and distracting from European challenges. NATO is to publish a new long-term strategy paper. Consider that the last one was in 2010 and did not mention Beijing and said it would seek a strategic partnership with Russia. Putin's actions broke the logjam in Sweden and Finland, and both now want to join NATO, but Turkey is holding it up.
Mandating COVID-19 vaccination was a mistake due to ethical and other concerns, a top government doctor warned Dr. Anthony Fauci after Dr. Fauci promoted mass vaccination.
“Coercing or forcing people to take a vaccine can have negative consequences from a biological, sociological, psychological, economical, and ethical standpoint and is not worth the cost even if the vaccine is 100% safe,” Dr. Matthew Memoli, director of the Laboratory of Infectious Diseases clinical studies unit at the U.S. National Institute of Allergy and Infectious Diseases (NIAID), told Dr. Fauci in an email.
“A more prudent approach that considers these issues would be to focus our efforts on those at high risk of severe disease and death, such as the elderly and obese, and do not push vaccination on the young and healthy any further.”
Employing that strategy would help prevent loss of public trust and political capital, Dr. Memoli said.
The email was sent on July 30, 2021, after Dr. Fauci, director of the NIAID, claimed that communities would be safer if more people received one of the COVID-19 vaccines and that mass vaccination would lead to the end of the COVID-19 pandemic.
“We’re on a really good track now to really crush this outbreak, and the more people we get vaccinated, the more assuredness that we’re going to have that we’re going to be able to do that,” Dr. Fauci said on CNN the month prior.
Dr. Memoli, who has studied influenza vaccination for years, disagreed, telling Dr. Fauci that research in the field has indicated yearly shots sometimes drive the evolution of influenza.
Vaccinating people who have not been infected with COVID-19, he said, could potentially impact the evolution of the virus that causes COVID-19 in unexpected ways.
“At best what we are doing with mandated mass vaccination does nothing and the variants emerge evading immunity anyway as they would have without the vaccine,” Dr. Memoli wrote. “At worst it drives evolution of the virus in a way that is different from nature and possibly detrimental, prolonging the pandemic or causing more morbidity and mortality than it should.”
The vaccination strategy was flawed because it relied on a single antigen, introducing immunity that only lasted for a certain period of time, Dr. Memoli said. When the immunity weakened, the virus was given an opportunity to evolve.
Some other experts, including virologist Geert Vanden Bossche, have offered similar views. Others in the scientific community, such as U.S. Centers for Disease Control and Prevention scientists, say vaccination prevents virus evolution, though the agency has acknowledged it doesn’t have records supporting its position.
Other Messages
Dr. Memoli sent the email to Dr. Fauci and two other top NIAID officials, Drs. Hugh Auchincloss and Clifford Lane. The message was first reported by the Wall Street Journal, though the publication did not publish the message. The Epoch Times obtained the email and 199 other pages of Dr. Memoli’s emails through a Freedom of Information Act request. There were no indications that Dr. Fauci ever responded to Dr. Memoli.
Later in 2021, the NIAID’s parent agency, the U.S. National Institutes of Health (NIH), and all other federal government agencies began requiring COVID-19 vaccination, under direction from President Joe Biden.
In other messages, Dr. Memoli said the mandates were unethical and that he was hopeful legal cases brought against the mandates would ultimately let people “make their own healthcare decisions.”
“I am certainly doing everything in my power to influence that,” he wrote on Nov. 2, 2021, to an unknown recipient. Dr. Memoli also disclosed that both he and his wife had applied for exemptions from the mandates imposed by the NIH and his wife’s employer. While her request had been granted, his had not as of yet, Dr. Memoli said. It’s not clear if it ever was.
According to Dr. Memoli, officials had not gone over the bioethics of the mandates. He wrote to the NIH’s Department of Bioethics, pointing out that the protection from the vaccines waned over time, that the shots can cause serious health issues such as myocarditis, or heart inflammation, and that vaccinated people were just as likely to spread COVID-19 as unvaccinated people.
He cited multiple studies in his emails, including one that found a resurgence of COVID-19 cases in a California health care system despite a high rate of vaccination and another that showed transmission rates were similar among the vaccinated and unvaccinated.
Dr. Memoli said he was “particularly interested in the bioethics of a mandate when the vaccine doesn’t have the ability to stop spread of the disease, which is the purpose of the mandate.”
The message led to Dr. Memoli speaking during an NIH event in December 2021, several weeks after he went public with his concerns about mandating vaccines.
“Vaccine mandates should be rare and considered only with a strong justification,” Dr. Memoli said in the debate. He suggested that the justification was not there for COVID-19 vaccines, given their fleeting effectiveness.
Julie Ledgerwood, another NIAID official who also spoke at the event, said that the vaccines were highly effective and that the side effects that had been detected were not significant. She did acknowledge that vaccinated people needed boosters after a period of time.
The NIH, and many other government agencies, removed their mandates in 2023 with the end of the COVID-19 public health emergency.
A request for comment from Dr. Fauci was not returned. Dr. Memoli told The Epoch Times in an email he was “happy to answer any questions you have” but that he needed clearance from the NIAID’s media office. That office then refused to give clearance.
Dr. Jay Bhattacharya, a professor of health policy at Stanford University, said that Dr. Memoli showed bravery when he warned Dr. Fauci against mandates.
“Those mandates have done more to demolish public trust in public health than any single action by public health officials in my professional career, including diminishing public trust in all vaccines.” Dr. Bhattacharya, a frequent critic of the U.S. response to COVID-19, told The Epoch Times via email. “It was risky for Dr. Memoli to speak publicly since he works at the NIH, and the culture of the NIH punishes those who cross powerful scientific bureaucrats like Dr. Fauci or his former boss, Dr. Francis Collins.”
President Joe Biden claimed that COVID vaccines are now helping cancer patients during his State of the Union address on March 7, but it was a response on Truth Social from former President Donald Trump that drew the ire of independent presidential candidate Robert F. Kennedy Jr.
During the address, President Biden said: “The pandemic no longer controls our lives. The vaccines that saved us from COVID are now being used to help beat cancer, turning setback into comeback. That’s what America does.”
President Trump wrote: “The Pandemic no longer controls our lives. The VACCINES that saved us from COVID are now being used to help beat cancer—turning setback into comeback. YOU’RE WELCOME JOE. NINE-MONTH APPROVAL TIME VS. 12 YEARS THAT IT WOULD HAVE TAKEN YOU.”
An outspoken critic of President Trump’s COVID response, and the Operation Warp Speed program that escalated the availability of COVID vaccines, Mr. Kennedy said on X, formerly known as Twitter, that “Donald Trump clearly hasn’t learned from his COVID-era mistakes.”
“He fails to recognize how ineffective his warp speed vaccine is as the ninth shot is being recommended to seniors. Even more troubling is the documented harm being caused by the shot to so many innocent children and adults who are suffering myocarditis, pericarditis, and brain inflammation,” Mr. Kennedy remarked.
“This has been confirmed by a CDC-funded study of 99 million people. Instead of bragging about its speedy approval, we should be honestly and transparently debating the abundant evidence that this vaccine may have caused more harm than good.
“I look forward to debating both Trump and Biden on Sept. 16 in San Marcos, Texas.”
Mr. Kennedy announced in April 2023 that he would challenge President Biden for the 2024 Democratic Party presidential nomination before declaring his run as an independent last October, claiming that the Democrat National Committee was “rigging the primary.”
Since the early stages of his campaign, Mr. Kennedy has generated more support than pundits expected from conservatives, moderates, and independents resulting in speculation that he could take votes away from President Trump.
Many Republicans continue to seek a reckoning over the government-imposed pandemic lockdowns and vaccine mandates.
President Trump’s defense of Operation Warp Speed, the program he rolled out in May 2020 to spur the development and distribution of COVID-19 vaccines amid the pandemic, remains a sticking point for some of his supporters.
Operation Warp Speed featured a partnership between the government, the military, and the private sector, with the government paying for millions of vaccine doses to be produced.
President Trump released a statement in March 2021 saying: “I hope everyone remembers when they’re getting the COVID-19 Vaccine, that if I wasn’t President, you wouldn’t be getting that beautiful ‘shot’ for 5 years, at best, and probably wouldn’t be getting it at all. I hope everyone remembers!”
President Trump said about the COVID-19 vaccine in an interview on Fox News in March 2021: “It works incredibly well. Ninety-five percent, maybe even more than that. I would recommend it, and I would recommend it to a lot of people that don’t want to get it and a lot of those people voted for me, frankly.
“But again, we have our freedoms and we have to live by that and I agree with that also. But it’s a great vaccine, it’s a safe vaccine, and it’s something that works.”
On many occasions, President Trump has said that he is not in favor of vaccine mandates.
An environmental attorney, Mr. Kennedy founded Children’s Health Defense, a nonprofit that aims to end childhood health epidemics by promoting vaccine safeguards, among other initiatives.
Last year, Mr. Kennedy told podcaster Joe Rogan that ivermectin was suppressed by the FDA so that the COVID-19 vaccines could be granted emergency use authorization.
He has criticized Big Pharma, vaccine safety, and government mandates for years.
Since launching his presidential campaign, Mr. Kennedy has made his stances on the COVID-19 vaccines, and vaccines in general, a frequent talking point.
“I would argue that the science is very clear right now that they [vaccines] caused a lot more problems than they averted,” Mr. Kennedy said on Piers Morgan Uncensored last April.
“And if you look at the countries that did not vaccinate, they had the lowest death rates, they had the lowest COVID and infection rates.”
Additional data show a “direct correlation” between excess deaths and high vaccination rates in developed countries, he said.
President Trump and Mr. Kennedy have similar views on topics like protecting the U.S.-Mexico border and ending the Russia-Ukraine war.
COVID-19 is the topic where Mr. Kennedy and President Trump seem to differ the most.
Former President Donald Trump intended to “drain the swamp” when he took office in 2017, but he was “intimidated by bureaucrats” at federal agencies and did not accomplish that objective, Mr. Kennedy said on Feb. 5.
Speaking at a voter rally in Tucson, where he collected signatures to get on the Arizona ballot, the independent presidential candidate said President Trump was “earnest” when he vowed to “drain the swamp,” but it was “business as usual” during his term.
John Bolton, who President Trump appointed as a national security adviser, is “the template for a swamp creature,” Mr. Kennedy said.
Scott Gottlieb, who President Trump named to run the FDA, “was Pfizer’s business partner” and eventually returned to Pfizer, Mr. Kennedy said.
Mr. Kennedy said that President Trump had more lobbyists running federal agencies than any president in U.S. history.
“You can’t reform them when you’ve got the swamp creatures running them, and I’m not going to do that. I’m going to do something different,” Mr. Kennedy said.
During the COVID-19 pandemic, President Trump “did not ask the questions that he should have,” he believes.
President Trump “knew that lockdowns were wrong” and then “agreed to lockdowns,” Mr. Kennedy said.
He also “knew that hydroxychloroquine worked, he said it,” Mr. Kennedy explained, adding that he was eventually “rolled over” by Dr. Anthony Fauci and his advisers.
MaryJo Perry, a longtime advocate for vaccine choice and a Trump supporter, thinks votes will be at a premium come Election Day, particularly because the independent and third-party field is becoming more competitive.
Ms. Perry, president of Mississippi Parents for Vaccine Rights, believes advocates for medical freedom could determine who is ultimately president.
She believes that Mr. Kennedy is “pulling votes from Trump” because of the former president’s stance on the vaccines.
“People care about medical freedom. It’s an important issue here in Mississippi, and across the country,” Ms. Perry told The Epoch Times.
“Trump should admit he was wrong about Operation Warp Speed and that COVID vaccines have been dangerous. That would make a difference among people he has offended.”
President Trump won’t lose enough votes to Mr. Kennedy about Operation Warp Speed and COVID vaccines to have a significant impact on the election, Ohio Republican strategist Wes Farno told The Epoch Times.
President Trump won in Ohio by eight percentage points in both 2016 and 2020. The Ohio Republican Party endorsed President Trump for the nomination in 2024.
“The positives of a Trump presidency far outweigh the negatives,” Mr. Farno said. “People are more concerned about their wallet and the economy.
“They are asking themselves if they were better off during President Trump’s term compared to since President Biden took office. The answer to that question is obvious because many Americans are struggling to afford groceries, gas, mortgages, and rent payments.
“America needs President Trump.”
Multiple national polls back Mr. Farno’s view.
As of March 6, the RealClearPolitics average of polls indicates that President Trump has 41.8 percent support in a five-way race that includes President Biden (38.4 percent), Mr. Kennedy (12.7 percent), independent Cornel West (2.6 percent), and Green Party nominee Jill Stein (1.7 percent).
A Pew Research Center study conducted among 10,133 U.S. adults from Feb. 7 to Feb. 11 showed that Democrats and Democrat-leaning independents (42 percent) are more likely than Republicans and GOP-leaning independents (15 percent) to say they have received an updated COVID vaccine.
The poll also reported that just 28 percent of adults say they have received the updated COVID inoculation.
The peer-reviewed multinational study of more than 99 million vaccinated people that Mr. Kennedy referenced in his X post on March 7 was published in the Vaccine journal on Feb. 12.
It aimed to evaluate the risk of 13 adverse events of special interest (AESI) following COVID-19 vaccination. The AESIs spanned three categories—neurological, hematologic (blood), and cardiovascular.
The study reviewed data collected from more than 99 million vaccinated people from eight nations—Argentina, Australia, Canada, Denmark, Finland, France, New Zealand, and Scotland—looking at risks up to 42 days after getting the shots.
Three vaccines—Pfizer and Moderna’s mRNA vaccines as well as AstraZeneca’s viral vector jab—were examined in the study.
Researchers found higher-than-expected cases that they deemed met the threshold to be potential safety signals for multiple AESIs, including for Guillain-Barre syndrome (GBS), cerebral venous sinus thrombosis (CVST), myocarditis, and pericarditis.
A safety signal refers to information that could suggest a potential risk or harm that may be associated with a medical product.
The study identified higher incidences of neurological, cardiovascular, and blood disorder complications than what the researchers expected.
President Trump’s role in Operation Warp Speed, and his continued praise of the COVID vaccine, remains a concern for some voters, including those who still support him.
Krista Cobb is a 40-year-old mother in western Ohio. She voted for President Trump in 2020 and said she would cast her vote for him this November, but she was stunned when she saw his response to President Biden about the COVID-19 vaccine during the State of the Union address.
“I love President Trump and support his policies, but at this point, he has to know they [advisers and health officials] lied about the shot,” Ms. Cobb told The Epoch Times.
“If he continues to promote it, especially after all of the hearings they’ve had about it in Congress, the side effects, and cover-ups on Capitol Hill, at what point does he become the same as the people who have lied?” Ms. Cobb added.
“I think he should distance himself from talk about Operation Warp Speed and even admit that he was wrong—that the vaccines have not had the impact he was told they would have. If he did that, people would respect him even more.”
Mathematicians use AI to identify emerging COVID-19 variants
Scientists at The Universities of Manchester and Oxford have developed an AI framework that can identify and track new and concerning COVID-19 variants…
Scientists at The Universities of Manchester and Oxford have developed an AI framework that can identify and track new and concerning COVID-19 variants and could help with other infections in the future.
Scientists at The Universities of Manchester and Oxford have developed an AI framework that can identify and track new and concerning COVID-19 variants and could help with other infections in the future.
The framework combines dimension reduction techniques and a new explainable clustering algorithm called CLASSIX, developed by mathematicians at The University of Manchester. This enables the quick identification of groups of viral genomes that might present a risk in the future from huge volumes of data.
The study, presented this week in the journal PNAS, could support traditional methods of tracking viral evolution, such as phylogenetic analysis, which currently require extensive manual curation.
Roberto Cahuantzi, a researcher at The University of Manchester and first and corresponding author of the paper, said: “Since the emergence of COVID-19, we have seen multiple waves of new variants, heightened transmissibility, evasion of immune responses, and increased severity of illness.
“Scientists are now intensifying efforts to pinpoint these worrying new variants, such as alpha, delta and omicron, at the earliest stages of their emergence. If we can find a way to do this quickly and efficiently, it will enable us to be more proactive in our response, such as tailored vaccine development and may even enable us to eliminate the variants before they become established.”
Like many other RNA viruses, COVID-19 has a high mutation rate and short time between generations meaning it evolves extremely rapidly. This means identifying new strains that are likely to be problematic in the future requires considerable effort.
Currently, there are almost 16 million sequences available on the GISAID database (the Global Initiative on Sharing All Influenza Data), which provides access to genomic data of influenza viruses.
Mapping the evolution and history of all COVID-19 genomes from this data is currently done using extremely large amounts of computer and human time.
The described method allows automation of such tasks. The researchers processed 5.7 million high-coverage sequences in only one to two days on a standard modern laptop; this would not be possible for existing methods, putting identification of concerning pathogen strains in the hands of more researchers due to reduced resource needs.
Thomas House, Professor of Mathematical Sciences at The University of Manchester, said: “The unprecedented amount of genetic data generated during the pandemic demands improvements to our methods to analyse it thoroughly. The data is continuing to grow rapidly but without showing a benefit to curating this data, there is a risk that it will be removed or deleted.
“We know that human expert time is limited, so our approach should not replace the work of humans all together but work alongside them to enable the job to be done much quicker and free our experts for other vital developments.”
The proposed method works by breaking down genetic sequences of the COVID-19 virus into smaller “words” (called 3-mers) represented as numbers by counting them. Then, it groups similar sequences together based on their word patterns using machine learning techniques.
Stefan Güttel, Professor of Applied Mathematics at the University of Manchester, said: “The clustering algorithm CLASSIX we developed is much less computationally demanding than traditional methods and is fully explainable, meaning that it provides textual and visual explanations of the computed clusters.”
Roberto Cahuantzi added: “Our analysis serves as a proof of concept, demonstrating the potential use of machine learning methods as an alert tool for the early discovery of emerging major variants without relying on the need to generate phylogenies.
“Whilst phylogenetics remains the ‘gold standard’ for understanding the viral ancestry, these machine learning methods can accommodate several orders of magnitude more sequences than the current phylogenetic methods and at a low computational cost.”
Journal
Proceedings of the National Academy of Sciences
DOI
10.1073/pnas.2317284121
Article Title
Unsupervised identification of significant lineages of SARS-CoV-2 through scalable machine learning methods
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