Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
Upside of Inequality Oxford Unintended Consequences
Econ Summary Highlights Debate

Thursday, October 8, 2026

AI Summary. France's official retirement age for full benefits was 62 in 2023, versus 67 in Denmark and the US, and its average actual retirement age was the lowest in Western Europe while life expectancy at 65 reaches about 87, two years longer than in the US.

Paul Krugman Krugman Wonks Out
Date Posted:

The sharp rise in the price of credit default swaps on French government debt implies a 1.2% of default over the next 5 years, which Krugman thinks “is too low” and cautions “France may have crossed the line from too big to fail to too big to save.”

Does France retire earlier than other wealthy countries despite longer lifespans?

Core argument: France’s official retirement age for full benefits was 62 in 2023, compared with 67 in both Denmark and the United States, and its average actual retirement age was the lowest in Western Europe.

France does stand out, even among fiscally troubled nations, in one main way: its persistent inability to get realistic about retirement. The official French retirement age — the age at which workers can collect full benefits — was only 62 in 2023. By comparison, the retirement age in Denmark was 67 (which is also the age in the U.S.). The average actual age of retirement, which is always lower than the statutory age because some people choose to accept reduced benefits, was lower in France than anywhere else in Western Europe. You don’t have to be a conservative to see France’s early retirement as unsustainable, especially given that French life expectancy at age 65 is about 87 years of age, 2 years longer than in the US. France’s reliance on the euro means that it’s all too easy to see how this loss of confidence could turn into an ugly crisis.

Takeaways by Macro Roundup® AI

  1. France’s official retirement age for full benefits was 62 in 2023, compared with 67 in both Denmark and the United States, and its average actual retirement age was the lowest in Western Europe.
  2. French life expectancy at age 65 is about 87, two years longer than in the United States, a gap that strengthens the case that France’s early retirement is unsustainable.
  3. France’s reliance on the euro makes it easy to see how a loss of confidence could turn into an ugly crisis.

Related Articles:

  • France’s Marine Le Pen Pledges To Rein In Public Spending — France's National Rally party, historically a champion of big-state spending, has pledged to clean up the country's degraded public finances alongside tax cuts it describes as a fully financed "competitiveness shock." The party also proposed lowering the retirement age from 62 to 60 for those who start working young, estimating €15bn–€20bn in pension savings from correcting "unjust or inefficient" measures.
  • France is the Biggest Loser in the Global Rates Reset — French government borrowing costs now exceed the country's nominal income growth by about 2 percentage points, the most unfavorable gap between borrowing costs and growth in the rich world. By contrast, Spanish and Greek bond yields remain about 2 percentage points below their income growth rates.
  • Le Boomer Spread — The gap between French and German 10-year government bond yields exceeded 140 basis points, up from 40–50 basis points, which the author attributes to political choices favoring pensioners over bondholders, including a suspended pension reform leaving the minimum retirement age near 62. French over-65s hold higher average incomes than working-age people.

AI Summary. Corporate profit margins, long regarded as one of the economy's most reliably mean-reverting series, have risen continuously so far this century. Measured through the national income accounts used in calculating GDP, profits now take a larger share of the economy than on the eve of the 1929 crash.

John Authers Bloomberg
Date Posted:

Since 2000, post-tax corporate profits as a share of GDP have trended upward across cyclical setbacks and are now near an all time high, above their 1929 level.

Have corporate profit margins stopped reverting to the mean?

Core argument: Corporate profits measured in the National Income and Product Accounts take a larger share of the U.S. economy than on the eve of the 1929 Great Crash.

Throughout the 20th century, profit margins were regarded as one of the purest mean-reverting series in the economy. So far this century, however, margins have done nothing but rise. Measured with the National Income and Product Accounts, part of the GDP calculation, profits are currently taking a bigger share of the economy even than on the eve of the Great Crash in 1929. The series comes with a lag, so we can assume the profit share on this basis is comfortably at a record by now.

Takeaways by Macro Roundup® AI

  1. Corporate profits measured in the National Income and Product Accounts take a larger share of the U.S. economy than on the eve of the 1929 Great Crash.
  2. Profit margins were regarded throughout the 20th century as one of the purest mean-reverting series in the economy, yet so far this century they have done nothing but rise.
  3. The National Income and Product Accounts profits series comes with a lag, so the profit share on this basis can be assumed to be comfortably at a record.

Related Articles:

  • US Focus: The Effect Of Soaring Profits — US nominal pre-tax corporate profits in the national accounts grew 23% over the past year, a pace not seen outside post-recession spikes since the mid-2000s. Wider margins were the key driver, as domestic profit growth far exceeded the 8% rise in corporate value added, pushing margins near all-time highs while the labor share hit new lows.
  • The Post‑COVID Decline in the Labor Share — The share of US national income paid to workers fell 1.6 percentage points below its pre-pandemic level, reaching a post-war low. The authors find this decline stems mainly from changes within industries rather than shifts in activity across sectors, following cyclical patterns seen in earlier recessions.
  • Are US Corporate Profit Margins Too High? — US after-tax non-financial corporate profit margins remain elevated by historical standards, estimated at 7.6% versus a post-1949 high of 8.2%, while employee pay as a share of non-financial corporate gross value added has fallen from 66% to 56%. One argument holds that subdued demographic growth leads companies to prioritize maximizing margins over expanding capacity.

AI Summary. US consumer prices have risen almost 29% over the past six years, about 3x the pace of the prior six years, and on average prices have risen faster than wages over that period.

Owen Tucker-Smith Wall Street Journal
Date Posted:

Inflation outpaced real year-over-year average hourly earnings growth in the 5 months through August.

Have prices risen faster than wages over the past six years?

Core argument: U.S. consumer prices, as measured by the consumer-price index, have risen almost 29% over the past six years, about three times the pace of the preceding six years.

Overall prices, as measured by the consumer-price index, have risen almost 29% in the past six years. During the six years before that, prices crept up at a third of that pace. Over the past six years, prices have, on average, risen faster than wages. The trend has been pronounced recently: In both July and August, inflation outpaced average hourly wage growth.

Takeaways by Macro Roundup® AI

  1. U.S. consumer prices, as measured by the consumer-price index, have risen almost 29% over the past six years, about three times the pace of the preceding six years.
  2. Prices have on average risen faster than wages over the past six years, with inflation outpacing average hourly wage growth in both July and August.

Related Articles:

  • Sticky Wage Norms and the Real Wage Cost of Unexpected Inflation — Firms set nominal wage increases by round-number rules—about 42% of increases below 6% fell within 0.01 percentage points of a whole or half number—and these rules rose only from about 2.7% to 3.5% as inflation peaked near 7%, contributing to falling real wages for job stayers.
  • Do Voters Punish Inflation or Pay Cuts? Inflation and Real Wages in U.S. Elections — An analysis of U.S. counties estimates that where wages grew faster than prices, voters supported the incumbent party more, while counties with larger real wage losses than average shifted more toward the opposition. A one-standard-deviation larger real wage loss is associated with shifts of roughly 0.10 and 0.19 percentage points in vote share and margin.
  • The Cost of Money is Part of the Cost of Living: New Evidence on the Consumer Sentiment Anomaly — Variation in the University of Michigan consumer sentiment index that inflation and unemployment cannot explain is strongly correlated with growth in consumer borrowing costs, such as mortgage and car loan rates. The authors estimate that including interest payments and homeownership costs in the consumer price index would raise measured inflation from 3% to 9%.

AI Summary. An analysis of federal aid recipients' tax-reported earnings finds the highest-earning bachelor's programs are concentrated at highly selective schools and in computer science, mathematics and electrical engineering. Nursing programs at several California schools produce graduates earning around $150,000 annually, placing them in the top 100 of nearly 25,000 programs analyzed.

Arfa Momin and Ron Lieber New York Times
Date Posted:

A HEA Group analysis of the earnings of 2018 and 2019 college graduates four years after graduation finds earnings are widely dispersed across schools in higher-earning fields such as computer science and economics and have a narrow dispersion in lower-earning fields such as English and drama.

Which college majors and schools produce the highest-earning graduates?

Core argument: HEA Group’s analysis of nearly 25,000 bachelor’s programs found computer science, mathematics and electrical engineering majors top the earnings list, with graduates of highly rejective schools including the Ivies, M.I.T., Stanford and U.C.L.A. dominating.

HEA Group tracked students who received federal financial aid and graduated during the 2017-18 and 2018-19 periods. The top of the earnings list is dominated by graduates of highly rejective schools — the Ivies and others, like M.I.T., Stanford and U.C.L.A. The majors that top the list are computer science, mathematics and electrical engineering. The income data come from whatever people reported on their federal tax returns. That means certain stock awards and other potential deferred compensation aren’t part of the totals. Nursing programs at a handful of California schools, including California State University, East Bay; San Francisco State University; and Samuel Merritt University, produce graduates earning around $150,000 annually, putting them in the top 100 out of the nearly 25,000 bachelor’s programs the HEA Group analyzed nationwide. They stick out amid quantitative and science majors from institutions like the California Institute of Technology and Cornell.

Takeaways by Macro Roundup® AI

  1. HEA Group’s analysis of nearly 25,000 bachelor’s programs found computer science, mathematics and electrical engineering majors top the earnings list, with graduates of highly rejective schools including the Ivies, M.I.T., Stanford and U.C.L.A. dominating.
  2. Nursing graduates of California State University, East Bay; San Francisco State University; and Samuel Merritt University earn around $150,000 annually, placing those programs in the top 100 amid quantitative and science majors from institutions like the California Institute of Technology and Cornell.
  3. HEA Group tracked federal financial aid recipients who graduated during the 2017-18 and 2018-19 periods, using income reported on federal tax returns, which excludes certain stock awards and other potential deferred compensation.

Related Articles:

  • Do Adults Have the Skills They Need to Thrive in a Changing World? — An international assessment of adult skills describes numeracy proficiency levels ranging from counting objects and adding small whole numbers at the lowest level, to extracting information from tables and graphs and performing basic arithmetic with money and percentages at Level 1, up to analysing complex mathematical information and critically evaluating whether data support a claim at Level 5.
  • Have Humans Passed Peak Brain Power? — The share of Americans reporting they read a book in the past year has fallen below half, alongside declining performance in numeracy and problem-solving in most countries. The share of adults unable to use mathematical reasoning to evaluate the validity of statements averages 25% in high-income countries and 35% in the US.
  • Standardized Test Scores and Academic Performance at a Public University System — A study of a large public urban university system finds that high school grade point average is a far stronger predictor of student academic success than SAT scores, contrasting with analyses of highly selective colleges that found the SAT superior. Under-represented minority students were less likely to graduate within six years at every grade point average level.

AI Summary. Russia's health regulator said inspections of a Siberian anti-plague institute found no emergency situations and no epidemiological risk after a 28-year-old researcher there died of pneumonia of unknown origin. The World Health Organization said it had not received sufficient information from Russia to complete a full risk assessment, and Russia declined offers of outside assistance.

Paul Sonne New York Times
Date Posted:

Russian authorities maintain that no “emergencies” have occurred at the Irkutsk Anti-Plague Research Institute. Jennifer Nuzzo, an epidemiologist at Brown University said, “Something is not adding up about this situation. You don’t quarantine 200 people for one plague case. You don’t close multiple hospital units in response to one infection.”

Is international concern persisting after a lab researcher's unexplained death?

Core argument: Russia’s health regulator Rospotrebnadzor said two biological safety commissions found “no emergency situations” at the Irkutsk Anti-Plague Institute after 28-year-old researcher Darya Shipilova died October 2, 2026, of pneumonia of unknown origin.

Russian authorities said on Wednesday that a researcher at a Siberian anti-plague institute who died from a mysterious pneumonia had been vaccinated against the pathogens she worked with and that no “emergency situations” had occurred at the lab. Rospotrebnadzor, the Russian health regulator, issued the statement after the United States urged Moscow to be more forthcoming about the possible public health incident and the World Health Organization asked for more information to make an accurate assessment of any threat. The relatively thin details from the Russian authorities have unnerved U.S. officials and others around the world who remain scarred by the coronavirus pandemic and efforts by the authoritarian government in China, where the virus originated, to cover up information.

Takeaways by Macro Roundup® AI

  1. Russia’s health regulator Rospotrebnadzor said two biological safety commissions found “no emergency situations” at the Irkutsk Anti-Plague Institute after 28-year-old researcher Darya Shipilova died October 2, 2026, of pneumonia of unknown origin.
  2. Medical observation was completed for more than 90% of Shipilova’s contacts with no infectious pathology detected, and nearly 5,000 laboratory tests found no hazardous pathogenic microorganisms.
  3. The World Health Organization said the public health risk to the general population appears low, then later said Russia had not provided sufficient information to complete a full risk assessment, after the U.S. State Department sent a diplomatic démarche and Russian officials declined President Trump’s offer of assistance.

Related Articles:

  • US ‘Monitoring’ Situation Around Suspected Case Of Plague In Russia — The US says it is monitoring a suspected case of pneumonic plague in Russia, where authorities have imposed sweeping quarantine measures in Siberia while maintaining there has been no outbreak. Regional officials convened an emergency meeting with the public health authority over a suspected case of a highly dangerous infectious disease.
  • The Russian Paradox: So Much Education, So Little Human Capital — Russia is an exception to the global correspondence between educational attainment and human capital, combining an advanced educational profile with strikingly poor health outcomes and only weak contributions to knowledge production and skills-intensive service exports. World Health Organization estimates put male life expectancy at age 15 near that of the world's least developed countries.
  • Russians Shun Putin’s Plea for More Babies as Population Shrinks — Russia's population decline has accelerated, with births falling 3.4% to 1.22m — the lowest level in roughly 25 years — while deaths rose 3.3% to 1.82m, according to Russia's Federal Statistics Service. The decline is attributed in part to Russia's war on Ukraine, though detailed mortality data has been classified and war deaths enter the statistics with long delays.

Wednesday, October 7, 2026

AI Summary. Federal Reserve Bank of New York researchers estimate that about 26% of a uniform tariff passes through into non-oil consumer goods prices over twelve months, with roughly 64% of that effect coming directly from higher import prices and the rest through domestic producers' input costs and markups. Pass-through into import prices is nearly immediate, while domestic price responses build gradually.

Mary Amiti,Sebastian Heise and David Weinstein Federal Reserve Bank of New York
Date Posted:

FRBNY estimates that a uniform 10% tariff raised consumer-goods prices 2.6% after 12 months: 1.7pp directly via imported final goods, and 0.9pp mainly via higher imported-input costs for domestically produced goods, with the latter effect building over 9–12 months.

How much of a tariff reaches consumer prices within a year?

Core argument: Amiti, Heise, and Weinstein estimate that a uniform tariff passes through to non-oil consumer goods prices at roughly 26 percent over twelve months, with a 10 percent tariff raising prices 2.6 percentage points, 1.7 points of it via the direct import channel.

Tariff pass-through into U.S. import prices is nearly complete. Instrumenting realized duty rates with statutory tariffs to account for endogenous sourcing and exemptions, tariff pass-through into consumer-goods import prices is about 90.5%; a 10% increase in the duty rate raises import prices about 9.1%. At twelve months, a uniform 10% tariff raises consumer-goods prices 2.639%: 1.694pp through the direct channel, 0.770pp through marginal costs, and 0.175pp through strategic complementarity. Import-price pass-through is essentially immediate, while domestic prices adjust gradually; the contribution of the two indirect channels roughly doubles between six and twelve months, with much of the overall adjustment occurring within nine to twelve months. For the actual 2025–26 tariffs, the direct channel accounts for about 70% of the estimated effect; the marginal-cost channel accounts for about 22%, with strategic complementarity accounting for the remainder. Because the regressions include date fixed effects, the tariff contribution is identified relative to less-exposed goods and should be read as illustrative rather than as the absolute contribution to aggregate goods CPI.

Takeaways by Macro Roundup® AI

  1. Amiti, Heise, and Weinstein estimate that a uniform tariff passes through to non-oil consumer goods prices at roughly 26 percent over twelve months, with a 10 percent tariff raising prices 2.6 percentage points, 1.7 points of it via the direct import channel.
  2. The two indirect channels — marginal costs from imported inputs (0.77 percentage points) and strategic complementarity in domestic markups (0.17 points) — account for 36 percent of the total effect and roughly double between six and twelve months after tariff implementation.
  3. Applied to the actual 2025–26 tariff schedule, the authors estimate the cumulative tariff contribution to goods CPI reached about 2.9 percentage points by February 2026, with import-price pass-through near 90 percent and retail pass-through of 0.56.

Related Articles:

  • The State of U.S. Tariffs July 24, 2026 — The average statutory US tariff rate stands at 11.1% and, under current law including scheduled increases, is projected to reach 11.8% by year-end. The authors estimate current-law tariffs will raise consumer prices by about 0.7% and generate roughly $1.9tn over ten years, with revenue somewhat lower after accounting for tariffs' negative effect on economic output.
  • Who Is Paying for the 2025 U.S. Tariffs? — The authors estimate that 94% of U.S. tariff costs were borne domestically over the first eight months of 2025, with a 10% tariff associated with only a 0.6 percentage point decline in foreign export prices. Pass-through into U.S. import prices later declined to 86%, shifting more of the burden to foreign exporters.
  • Demand-Driven Inflation — Demand and supply curves estimated from pre-pandemic data imply relatively flat demand curves in the US and euro area, so adverse supply shifts would produce large output losses but comparatively little inflation. The authors argue explaining the observed combination of high inflation and output requires outward demand shifts, including accommodative monetary policy alongside fiscal expansion.

AI Summary. Incorporating tariffs into the standard cost-of-capital framework, researchers estimate US tariffs raised the economy-wide marginal effective tax rate on new investment by 4.2 percentage points to 17.0%, with equipment hit hardest at 26.1 percentage points. That increase offsets the 3.5 percentage point reduction from the One Big Beautiful Bill Act.

Kyle Pomerleau, Thomas Brosy, Robert McClelland and John Wong American Enterprise Institute
Date Posted:

The IEEPA tariffs through January 2026 raised equipment’s user cost of capital 9%, from 17.7% to 19.3%. With depreciation unchanged, the required pre-tax net return rose 1.6pp, 4.3% to 5.9%, a tax at purchase that expensing cannot eliminate.

Do tariffs raise the effective tax rate on new investment?

Core argument: Tariffs in force before the February 20, 2026 Supreme Court ruling in Learning Resources v. Trump raised the economy-wide marginal effective tax rate on new US investment by 4.2 points, from 12.8 percent to 17.0 percent, and the cost of capital by 2.7 percent, the AEI authors estimate.

The standard Hall-Jorgenson user cost of capital framework defines the minimum gross required return on an additional unit of capital. The service price of capital (SS) is the minimum pretax gross return required on a new investment; the minimum pretax net return (ρrho) equals SS minus economic depreciation. Consider imported equipment requiring a 25% gross return: 20% to cover depreciation and 5% shareholders’ demanded return. A 10% tariff raises the cost of capital to 27.5%. [Thus the minimum pretax net return—the hurdle rate—rises from 5% to 7.5%]. For equipment, tariffs raise the cost of capital 9%, from 17.7% to 19.3%: 86% of the burden is direct, 14% indirect. 100% bonus depreciation reduced the equipment METR from 19.1% to 4.1%; tariffs raised it to 30.3%, more than offsetting the tax cut.

Takeaways by Macro Roundup® AI

  1. Tariffs in force before the February 20, 2026 Supreme Court ruling in Learning Resources v. Trump raised the economy-wide marginal effective tax rate on new US investment by 4.2 points, from 12.8 percent to 17.0 percent, and the cost of capital by 2.7 percent, the AEI authors estimate.
  2. Equipment bore the largest estimated burden, with its marginal effective tax rate rising 26.1 points from 4.1 percent to 30.3 percent and its cost of capital up 9.0 percent, while mainframes and PCs saw a 26.6 percent cost-of-capital increase.
  3. The estimated 4.2 point tariff-driven increase in the marginal effective tax rate offset the One Big Beautiful Bill Act’s 3.5 point reduction, leaving a net 0.8 point rise economy-wide and an 11.1 point net increase for equipment.

Related Articles:

  • Blunt Tariffs Undermine Efforts To Reshore High-Tech Manufacturing — Computer and electronic products manufacturers import 37% of their intermediate inputs and capital equipment, chemical manufacturers 33%, and transportation equipment manufacturers 27%. Broad tariffs may push some sourcing domestically over time, but many inputs will simply cost more, making American manufacturers less competitive globally.
  • Help for the Heartland? The Employment and Electoral Effects of the Trump Tariffs in the United States — The authors find that the combined effect of U.S.-China trade war import tariffs, retaliatory tariffs, and farm subsidies on employment in exposed U.S. locations was at best a wash and possibly mildly negative, while residents of tariff-protected areas became less likely to identify as Democrats and more likely to vote Republican.
  • Tariffs are Dumb Enough to (Almost) Work — A universal 15% tariff on imported goods could raise roughly $300–$400bn annually, a fraction of what a value-added tax would generate but real revenue given U.S. imports of about $4tn. The author argues tariffs are a poorly designed form of consumption tax that could build political groundwork for replacing them with a more efficient value-added tax.

AI Summary. Large US cloud and artificial-intelligence companies have raised $48bn in European-currency bonds, more than triple the prior year's total, spread across €27bn, £13bn and CHF7.5bn. The issuance adds highly rated US borrowers to European credit indices and deepens the thin market for longer-dated maturities, with few signs so far of crowding out other issuers.

Huw van Steenis Apollo
Date Posted:

Hyperscalers have raised $48B in European-currency bonds this year, more than 3x all of 2025. They now account for 3% of euro IG issuance, 10% of sterling and 22% of Swiss franc, versus 8% in the US.

Are European bond markets funding the US AI buildout?

Core argument: Hyperscalers have raised $48 billion in bonds denominated in European currencies this year — €27 billion, £13 billion and CHF7.5 billion — more than triple the full-year 2025 total.

Hyperscalers have raised $48 billion in bonds in European currencies this year, already more than triple the entire amount raised last year. This breaks down as €27 billion, £13 billion, and CHF 7.5 billion. There are few signs of crowding out: non-hyperscaler IG issuance remains strong and little changed YoY, and corporate spreads remain tight. Rather, hyperscalers are adding highly rated US borrowers (AA- or higher) to European credit indices that have traditionally had more A-to-BBB exposure. Hyperscalers account for 7% of euro issuance with maturities of 10 years or more, versus 3% across all maturities, and 3% of the 10-year-plus euro IG index versus 1% of the overall index. This adds depth at longer-dated maturities—thin outside sovereign issuance—at a time when some governments, including the UK, have been shortening duration.

Takeaways by Macro Roundup® AI

  1. Hyperscalers have raised $48 billion in bonds denominated in European currencies this year — €27 billion, £13 billion and CHF7.5 billion — more than triple the full-year 2025 total.
  2. Hyperscaler issuance shows few signs so far of crowding out European borrowers, with non-hyperscaler investment-grade issuance little changed year-over-year and corporate spreads still tight.
  3. Hyperscalers account for 7% of euro issuance with maturities of 10 years or more versus 3% across all maturities, adding borrowers rated AA- or higher to indices traditionally weighted toward A to BBB.

Related Articles:

  • Financing the AI Buildout — The authors estimate roughly 57 gigawatts of operating US data center capacity against a planned development pipeline of about 509 gigawatts, which is not a completion forecast since projects may be delayed, scaled back, or abandoned. Their central scenario has 182.8 gigawatts of added capacity becoming operational through 2032, 117.2 gigawatts completed later, and 226.9 gigawatts never completed.
  • AI Set to be Largest CapEx Cycle Ever … and Soon Majority Externally Financed — Hyperscaler and data-center investment is tracking toward $1.5tn annually by 2030, which in real terms would exceed the 2005-06 housing boom, the 1990s fiber peak, and the 1882 railroad peak combined. External debt and equity are projected to fund close to 90% of the buildout, making it dependent on credit markets.
  • AI Is Driving Up Treasury Yields: ‘It Just Touches Everything’ — Investment-grade companies have sold nearly $1.5tn of bonds, up 36% from a year earlier, and some investors have sold US Treasuries to buy higher-yielding corporate debt. Bank of America economists estimate the surge in corporate-debt sales, along with more mortgage-backed securities issuance, pushed 10-year rates up by about 0.3 percentage point.

AI Summary. The Bloomberg Dollar Spot Index rose as much as 0.5% alongside oil prices following a pickup in Iranian attacks on vessels in the Strait of Hormuz, approaching a new peak for the year. Nearly all Group of 10 currencies weakened against the dollar, with the euro lagging all its major peers.

Anya Andrianova and Melos Ambaye Bloomberg
Date Posted:

The Bloomberg Dollar Spot Index is approaching a record high for the year as political risk from France weighs on the euro, though it remains ~4% under its pre-Liberation Day level.

Does rising shipping conflict strengthen the dollar against major currencies?

Core argument: The Bloomberg Dollar Spot Index rose as much as 0.5%, approaching a new peak for the year, alongside a rise in oil after a pickup in Iranian attacks on vessels in the Strait of Hormuz.

The Bloomberg Dollar Spot Index rose as much as 0.5% alongside oil after a pickup in Iranian attacks on vessels in the Strait of Hormuz. The gauge is approaching a new peak this year. Nearly all currencies in the Group of 10 have weakened against the greenback, with the euro lagging behind all its major peers.

Takeaways by Macro Roundup® AI

  1. The Bloomberg Dollar Spot Index rose as much as 0.5%, approaching a new peak for the year, alongside a rise in oil after a pickup in Iranian attacks on vessels in the Strait of Hormuz.
  2. Nearly all Group of 10 currencies weakened against the dollar, with the euro lagging all of its major peers.

Related Articles:

  • Foreign Capital Flows Into US Stocks Hit Record As Appetite For Debt Fades — Foreign investors made a record $942bn in net purchases of US stocks and investment fund shares over 12 months, the highest rolling 12-month total in Treasury data going back to 1985. Foreign demand for US debt securities moved in the opposite direction, falling to a net $188bn in the second quarter from $314bn in the first.
  • World’s Unusually High Dollar Exposure Risks Fueling Selloff — Pension funds and insurers in Canada, Denmark, Australia, Taiwan, Japan and Finland hedged just 41% of their foreign-currency exposure, the lowest share since at least 2015. With some of the largest holders of US assets carrying little protection against a weaker dollar, the currency is at risk of steeper declines if sentiment turns.
  • Financing the AI Buildout — The authors estimate roughly 57 gigawatts of operating US data center capacity against a planned development pipeline of about 509 gigawatts, which is not a completion forecast since projects may be delayed, scaled back, or abandoned. Their central scenario has 182.8 gigawatts of added capacity becoming operational through 2032, 117.2 gigawatts completed later, and 226.9 gigawatts never completed.

AI Summary. A global bond sell-off pushed long-term borrowing costs in the US, Europe and the UK to their highest levels in decades, with the 30-year US Treasury yield reaching 5.73%, its highest since 2002. Investors cited concerns over inflation and high public debt burdens, with French and Italian yields also rising.

Ian Smith, Emily Herbert and Kate Duguid Financial Times
Date Posted:

The US 10-year Treasury yield fell to 5.29% from 5.36% after strong auction demand. The 30-year yield rose to as high as 5.73%, its highest level since 2002, before settling at 5.66%.

Are inflation and debt worries pushing long-term yields to decades-highs?

Core argument: The 30-year US Treasury yield rose as much as 0.09 percentage points to 5.73%, its highest level since 2002, before easing to 5.66% following a strong 10-year Treasury auction.

A sell-off in US government bonds eased after an auction of 10-year Treasuries drew strong demand in a sign that investors were seeking to lock in the highest yields since the turn of the millennium. US 10-year Treasury yields, a benchmark for borrowing costs in the world’s biggest economy, climbed as high as 5.36% in volatile trading early on Wednesday. But yields fell back sharply after a $39bn auction went smoothly, with the 10-year recently trading at 5.29%. France’s 10-year borrowing costs rose to 4.87%, heading back towards the post-2002 high reached this month, amid persistent worries that the Eurozone’s second-biggest economy was heading for a debt reckoning.

Takeaways by Macro Roundup® AI

  1. The 30-year US Treasury yield rose as much as 0.09 percentage points to 5.73%, its highest level since 2002, before easing to 5.66% following a strong 10-year Treasury auction.
  2. A global bond sell-off pushed long-term borrowing costs in the US, Europe and the UK back to their highest levels in decades, as fears over inflation and high public debt burdens rattled investors.
  3. French and Italian government bond yields each rose more than 0.1 percentage points, extending a series of wild swings in European government debt markets.

Related Articles:

  • France is the Biggest Loser in the Global Rates Reset — French government borrowing costs now exceed the country's nominal income growth by about 2 percentage points, the most unfavorable gap between borrowing costs and growth in the rich world. By contrast, Spanish and Greek bond yields remain about 2 percentage points below their income growth rates.
  • Soaring Bond Yields, Gaping Deficits and Towering Debts: What Could Go Wrong? — An analysis of 22 rich countries estimates that if each refinanced its entire debt at current five-year bond yields, Britain would need the largest primary surplus to stabilize its debt-to-GDP ratio, about 1.5%, followed by Italy at 1.4%, France at 1.2% and America at 1%.
  • How Might Fiscal Policy Respond to the Rise of Artificial Intelligence? — The Congressional Budget Office estimates that a permanent 0.5 percentage point increase in annual productivity growth would lower publicly held federal debt after 30 years by 39% of GDP, offsetting roughly half the projected rise from 101% of GDP to 175%. Higher revenue and slower spending growth outweigh higher interest costs.

Tuesday, October 6, 2026

AI Summary. Analysis of English genealogical records and marriage registries estimates that the underlying correlation in social status across generations is close to 0.8, with status correlation detectable even among relatives nine generations apart. The authors find this persistence unchanged over four centuries, concluding that policies aimed at raising social mobility have not altered it.

Gregory Clark Southern Denmark University
Date Posted:

Clark estimates that the intergenerational correlation of relative socioeconomic status in England remained ~0.8 btw 1600 and 2026. The pattern of correlations across near and distant relatives fits a model of genetic inheritance with strong assortative mating.

How persistent is social status across generations in England?

Core argument: Drawing on a genealogical database of 436,185 English people spanning 1600–2026 and records of about 1.7 million English marriages from 1837–2022, the authors estimate the underlying intergenerational correlation in social status at close to 0.8, higher than conventional measures indicate.

A large genealogical database of [436,185] English people 1600-2026, as well as detailed records of [~1.7mn marriages] in England 1837-2022, [reveals] social status is much more persistent across generations than conventionally measured. The [inferred] underlying correlation in status across generations is close to 0.8, implying that even relatives as distant as nine generations apart still show correlation in social status. [Ratios of correlations among siblings, parents, aunts/uncles and cousins cancel common measurement-error attenuation: raw parent-child correlations average .39, versus .77 for inferred underlying persistence. Independently, surnames selected as elite by 1858-87 wealth yield a per-generation status persistent coefficient of b=.82 for occupational status and .80 for house value]. The strength of status persistence remains unchanged 1600-2026.

Takeaways by Macro Roundup® AI

  1. Drawing on a genealogical database of 436,185 English people spanning 1600–2026 and records of about 1.7 million English marriages from 1837–2022, the authors estimate the underlying intergenerational correlation in social status at close to 0.8, higher than conventional measures indicate.
  2. The estimated correlation in social status implies that relatives as distant as nine generations apart still show correlated status, with the strength of persistence unchanged from 1600 to 2026.
  3. The authors argue that the Industrial Revolution, the Demographic Transition, the emancipation of women, universal voting, and the modern welfare state have not increased English social mobility rates, and that resources poured into raising mobility have achieved nothing.

Related Articles:

  • The Inheritance Of Social Status: England, 1600 to 2022 — Using a genealogical database of 422,374 English people with rarer surnames, the authors find social status persists strongly even among distant relatives, with status correlations declining by a constant factor of 0.79 per step in the lineage across all status measures and eras studied. The authors argue this constancy suggests social interventions have modest effects.
  • The Myth of Nordic Mobility: Social Mobility Rates in Modern Denmark and Sweden — Correcting for measurement error by using relative rather than absolute correlations among relatives, the authors estimate that educational intergenerational mobility in Denmark and Sweden is much lower than conventionally measured, with parent-child and sibling correlations much higher. They argue Nordic education spending and income compression have at best modestly reduced families' role in children's educational outcomes.
  • For Whom the Bell Curve Tolls: A Lineage of 400,000 English Individuals 1750-2020 Shows Genetics Determines Most Social Outcomes — A study of 402,000 English individuals across 1750–2020 estimates an intergenerational occupational status correlation of 0.88 and a genetic correlation between spouses of 0.76, which the authors interpret as a strong genetic basis for the persistence of social status. The authors argue that highly assortative mating around status genetics limits what policy can do to raise social mobility.

AI Summary. U.S. crude oil production rose from about 5m barrels per day in the late 2000s to nearly 14m by 2025, turning the country from a major petroleum importer into a net exporter. The authors estimate that adverse oil supply news shocks, which once contracted industrial production, now expand it.

Diego Känzig, James Stock and Luca Zanotti National Bureau of Economic Research
Date Posted:

The US shifted from a large net oil importer to a net exporter around 2010. Computing separate impulse responses pre-and post-2010, Känzig, et al find that adverse global oil-supply news switches from reducing US industrial production to raising it by a similar magnitude.

Has becoming a net oil exporter reversed how supply shocks affect output?

Core argument: Before 2010, an adverse oil supply news shock produced a persistent contraction in U.S. industrial production of roughly -0.6 percent after a year, while from 2010 onward the point estimate turns positive over most horizons and peaks near +1 percent.

As Figure 2 shows, U.S. crude oil production rose from roughly 5 million barrels per day in the late 2000s to almost 14 million barrels per day by 2025. Over the same period, net imports of crude oil and petroleum products fell steeply and turned negative in 2019. The United States thereby went from being one of the world’s largest petroleum importers to a net petroleum exporter. We examine whether the U.S. response to oil supply news shocks differs in the post-shale period by allowing the impulse responses to change from January 2010 onward. Figure 7 reports the results. Before 2010, an adverse oil supply news shock produced a persistent contraction in industrial production, reaching roughly -0.6 percent after a year. From 2010 onward, the point estimate instead becomes positive over most horizons and reaches almost +1 percent at its peak. Both the pre-2010 contraction and the post-2010 expansion are economically large and statistically significant over a range of horizons. This contrast mirrors the evidence from the time-varying VAR.

Takeaways by Macro Roundup® AI

  1. Before 2010, an adverse oil supply news shock produced a persistent contraction in U.S. industrial production of roughly -0.6 percent after a year, while from 2010 onward the point estimate turns positive over most horizons and peaks near +1 percent.
  2. U.S. crude oil production rose from roughly 5 million barrels per day in the late 2000s to almost 14 million barrels per day by 2025, with net imports of crude oil and petroleum products turning negative in 2019.
  3. The pre-2010 contraction and the post-2010 expansion in U.S. industrial production following oil supply news shocks are both economically large and statistically significant over a range of horizons, mirroring evidence from a time-varying VAR.

Related Articles:

  • U.S. Economy Less Vulnerable To Geopolitical Oil Price Shocks Than In The Past — The United States became a net oil exporter in late 2019, and oil and oil product spending fell from near 8% of GDP in 1980 to 3% in 2024. The authors estimate a 15% global oil supply disruption would now cut annualized U.S. real GDP growth by 0.3pp, versus 1.7pp in the rest of the world.
  • Fighting Words: The Energy Transition in 2026 — Estimates based on primary energy overstate how much electricity is needed to replace oil in passenger cars, since electric motors convert 80%-90% of electricity into motion versus about 18% for gasoline cars. Measuring useful final energy net of waste heat avoids this "primary energy fallacy": the US consumed 45 exajoules of useful final energy versus 95 exajoules of primary energy.
  • Power Politics: Energy Self-Sufficiency in a Modern Mercantilist World — China leads in adding power to the grid, with more than 30,000 miles of ultra-high-voltage transmission lines versus zero in the US and lead times for large transformers of 48 weeks against a US average of 143 weeks. This positions China to accommodate new demand sources such as artificial intelligence.

AI Summary. Measuring AI-driven job losses in the arts is difficult because media firms are reticent about their AI use and the effects are hard to separate from factors like Hollywood consolidation, offshoring of content production, and the shift to social media creators. All subsectors of the digital arts industry are losing jobs while in-person entertainment continues to grow.

Joseph Politano Apricitas Economics
Date Posted:

The US has lost more than 200,000 jobs in “creative” industries – notably TV and movies – since mid 2022. “The clearest evidence of AI’s influence is just that all subsectors of the digital arts industry are losing jobs, while in-person entertainment is still growing at a healthy pace.”

Is it hard to measure AI's job losses in the arts?

Core argument: All subsectors of the digital arts industry are losing jobs while in-person entertainment continues to grow at a healthy pace, which the author presents as perhaps the clearest evidence of AI’s influence.

Proving the exact amount of AI-driven job loss in the arts is extremely difficult. [U.S. creative industries have nevertheless lost more than 200,000 jobs over four years, including roughly 50,000 in the last year. Movie and TV employment alone has fallen by more than 100,000, nearly one-third of the sector, while publishing has lost more than 70,000 jobs]. The effects of AI are hard to disentangle from other factors currently affecting arts businesses, like consolidation in Hollywood, offshoring of content production, or the continued displacement of traditional media providers in favor of social media creators. Yet perhaps the clearest evidence of AI’s influence is just that all subsectors of the digital arts industry are losing jobs, while in-person entertainment is still growing at a healthy pace.

Takeaways by Macro Roundup® AI

  1. All subsectors of the digital arts industry are losing jobs while in-person entertainment continues to grow at a healthy pace, which the author presents as perhaps the clearest evidence of AI’s influence.
  2. Media firms disclose little about their AI use, both to avoid public backlash and to preserve the legal basis for their copyrights, leaving the exact amount of AI-driven job loss in the arts extremely difficult to prove.
  3. AI’s effects on arts businesses are hard to disentangle from consolidation in Hollywood, offshoring of content production, and the displacement of traditional media providers by social media creators.

Related Articles:

  • The Jobs Apocalypse Is Postponed. An AI Jobs Boom Is Here — Employment in five industries tied to the data-centre build-out, including electrical contracting and equipment manufacturing, has risen roughly 320,000 above what broader construction and manufacturing trends would suggest. Engineers, software developers, mathematicians and data scientists have added about 730,000 jobs above the trend for professional employment overall.
  • AI is the Democratic Party’s Next Villain — Mentions of billionaires in Democratic fundraising emails quadrupled to a peak above 20% of all emails sent and have held near 15%, making anti-billionaire messaging a mainstay. Anti-AI populism remains far smaller and is entering Democratic rhetoric not as a jobs or safety issue but as something billionaires are building.
  • Forget AI. The California Job Market Is Powered By Healthcare — California's healthcare sector drives its job growth despite the state having the sixth-youngest population by share aged 65 or older and residents reporting fewer chronic conditions than almost anywhere else. State policy is one plausible partial explanation: expanded Medicaid coverage, including for undocumented residents, cut the uninsured share to 5.9%, while spending per enrollee is rising faster than enrollment.

AI Summary. The 10-year US Treasury yield has risen past its 2007 high to its highest level since 2002, with the latest move driven by a US services survey showing services inflation proving intractable. The share of supply managers reporting rising prices climbed to its highest level since the post-pandemic surge.

John Authers Bloomberg
Date Posted:

The US 10-year Treasury yield is at its highest level since 2002. Authers notes: “A move of this magnitude should be a problem for equities. It hasn’t been…. On the face of it, the big tech companies are proving immune to the rising cost of money” likely due to rapidly growing earnings.

Are rising long-term bond yields driven by stubborn services inflation?

Core argument: The 10-year Treasury yield has broken above its 2007 high, the year a bond sell-off triggered the Global Financial Crisis, reaching its highest level since 2002.

The 10-year Treasury yield has now broken through its high from 2007, when a bond sell-off triggered the Global Financial Crisis. It’s now the highest since 2002. The latest impulse upward came from the ISM Services report for the US. Services inflation is proving intractable, and the proportion of supply managers complaining about rising prices climbed to its highest since the post-pandemic surge. With the exception of a few months at the top of the oil price spike in 2008, and in the brief spasm that followed Hurricane Katrina in 2005, the reading is the strongest since the series began in 1997.

Takeaways by Macro Roundup® AI

  1. The 10-year Treasury yield has broken above its 2007 high, the year a bond sell-off triggered the Global Financial Crisis, reaching its highest level since 2002.
  2. The ISM Services report drove the latest upward move in yields, with services inflation proving intractable and the share of supply managers reporting rising prices climbing to its highest since the post-pandemic surge.
  3. Apart from a few months at the peak of the 2008 oil price spike and the brief episode after Hurricane Katrina in 2005, the ISM Services prices reading is the strongest since the series began in 1997.

Related Articles:

  • Foreign Capital Flows Into US Stocks Hit Record As Appetite For Debt Fades — Foreign investors made a record $942bn in net purchases of US stocks and investment fund shares over 12 months, the highest rolling 12-month total in Treasury data going back to 1985. Foreign demand for US debt securities moved in the opposite direction, falling to a net $188bn in the second quarter from $314bn in the first.
  • US Focus: The Effect Of Soaring Profits — US nominal pre-tax corporate profits in the national accounts grew 23% over the past year, a pace not seen outside post-recession spikes since the mid-2000s. Wider margins were the key driver, as domestic profit growth far exceeded the 8% rise in corporate value added, pushing margins near all-time highs while the labor share hit new lows.
  • A Catalyst For The AI Bubble Break — Historically, controlling for valuations, a 1% rise in the share of the market represented by initial public offerings has been associated with roughly a 4% decline in prices. With large artificial-intelligence company listings expected and share issuance exceeding buybacks, equity supply could shift from shrinking about 1% a year to growing near 5%, implying returns roughly 20% below average.

AI Summary. France's National Rally party, historically a champion of big-state spending, has pledged to clean up the country's degraded public finances alongside tax cuts it describes as a fully financed "competitiveness shock." The party also proposed lowering the retirement age from 62 to 60 for those who start working young, estimating €15bn–€20bn in pension savings from correcting "unjust or inefficient" measures.

Leila Abboud, Sarah White and Ian Smith Financial Times
Date Posted:

Marine Le Pen has proposed a referendum that would cap national debt at 60% of GDP and reduce the public deficit by .5pp annually to reach “close to a balanced budget.” At the same time she has also proposed to reduce the retirement age from 62 to 60.

Is a populist party shifting toward fiscal restraint and tax cuts?

Core argument: Marine Le Pen’s Rassemblement National estimates it could save €15bn–€20bn on pensions spending by correcting what it calls “unjust or inefficient measures” in the current system, helping fund its plans.

Long a champion of big-state spending to protect the working class, Le Pen in recent months has swung behind the idea that France needs a major clean-up of its degraded public finances. Her party, Rassemblement National (RN), also pledged tax cuts on Tuesday in what it said would be a fully financed “competitiveness shock” from 2027. Allianz chief economist Ludovic Subran called the proposals “voodoo economics.” “The RN now presents itself as the party of fiscal rectitude, but the route to its targets is unclear. The savings figures are disputed,” he said. Delivering the announced savings would be impossible unless the RN reversed tack to lower the retirement age.

Takeaways by Macro Roundup® AI

  1. Marine Le Pen’s Rassemblement National estimates it could save €15bn–€20bn on pensions spending by correcting what it calls “unjust or inefficient measures” in the current system, helping fund its plans.
  2. Rassemblement National pledged tax cuts as part of what it said would be a fully financed “competitiveness shock” from 2027, alongside lowering the retirement age from 62 to 60 for those who begin working at a young age.
  3. Le Pen, long a champion of big-state spending to protect the working class, has swung behind the idea that France needs a major clean-up of its degraded public finances.

Related Articles:

  • France is the Biggest Loser in the Global Rates Reset — French government borrowing costs now exceed the country's nominal income growth by about 2 percentage points, the most unfavorable gap between borrowing costs and growth in the rich world. By contrast, Spanish and Greek bond yields remain about 2 percentage points below their income growth rates.
  • Le Boomer Spread — The gap between French and German 10-year government bond yields exceeded 140 basis points, up from 40–50 basis points, which the author attributes to political choices favoring pensioners over bondholders, including a suspended pension reform leaving the minimum retirement age near 62. French over-65s hold higher average incomes than working-age people.
  • Soaring Yields Find Europe’s Weak Spot — A rapid rise in long-term US Treasury yields has highlighted vulnerabilities elsewhere, notably France, where risks are elevated. Because France is in the euro zone, any crisis there would extend to the currency area, and European stocks have sold off alongside a weakening euro.