Edward Conard

Top Ten New York Times Bestselling Author

  • “…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
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…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
  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
  • “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
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
Upside of Inequality Oxford Unintended Consequences
Econ Summary Highlights Debate

Tuesday, November 10, 2026

AI Summary. Racial and ethnic minorities accounted for all US population growth in recent years, offsetting losses in the white population, and now make up 52.8% of Americans under 30 versus 43.9% of the total population. Projections indicate minorities will exceed half the under-35 population by 2030 even with zero immigration.

William Frey Brookings Institution
Date Posted:

Non-Hispanic whites account for 47.2% of Americans under 30, ~9pp less than their share of the overall population. 69% of this difference reflects the larger Hispanic share among younger Americans (6.1pp), with smaller contributions from Blacks (1.1 pp) and multiracial Americans (1.8 pp), while the Asian share is ~ unchanged.

Are racial and ethnic minorities now a majority of young Americans?

Core argument: Racial and ethnic minorities comprise 52.8% of the U.S. under-30 population, higher than their 43.9% share of the total U.S. population, and they hold a majority at each individual age from zero to 29.

Between the 2020 census and July 1, 2025, racial and ethnic minorities—especially Latino or Hispanic and Asian Americans—accounted for all the nation’s population gains, countering significant losses in the white population. The 2020 to 2025 shifts in nonwhite racial and ethnic minority population shares have now led to a tipping point for the under-30 population, such that more than half identifies all or in part with a nonwhite racial or ethnic group. This is the case for each individual age between zero and 29, as well as for the entire under-30 population, where the combined minority groups comprise 52.8% of the population—substantially higher than those groups’ 43.9% share of the total U.S. population. In 2030, the nonwhite population will comprise more than half of the nation’s under-35 population. Those projections establish that even with absolutely zero immigration, the 2030 census could show that minority populations comprise 50.3% of the under-35 population, and even larger shares with moderate or high levels of immigration.

Takeaways by Macro Roundup® AI

  1. Racial and ethnic minorities comprise 52.8% of the U.S. under-30 population, higher than their 43.9% share of the total U.S. population, and they hold a majority at each individual age from zero to 29.
  2. Between the 2020 census and July 1, 2025, racial and ethnic minorities—especially Latino or Hispanic and Asian Americans—accounted for all U.S. population gains, countering losses in the white population.
  3. Projections indicate that even with zero immigration, the 2030 census could show minority populations comprising 50.3% of the under-35 population, with larger shares under moderate or high immigration.

Related Articles:

  • How 250 Years Of Immigration Shaped America — Periods of high immigration to America have tended to be followed by restrictions, including the 1882 ban on Chinese laborers and 1924 quotas that capped European arrivals and barred Asian immigration. Those quotas suppressed immigration for 40 years, and the foreign-born share of the population fell to about 5% by 1970.
  • Americans Are Done With Being Put in Racial Boxes — Immigration from Asia and Latin America has been the chief driver of rising US diversity and the declining non-Hispanic White share of the population. Intermarriage across racial and ethnic lines is far more common among Hispanic and Asian Americans, and rising among Black and non-Hispanic White Americans, leaving more people outside single racial categories.
  • The Pig In The Python: US Decennial Labor Flows And Economic Opportunity, 1910–2040 — The surge of baby boomers, women, and immigrants entering the US labor force between 1960 and 1980 was difficult for the economy to absorb, and young workers' wages fell sharply after peaking in the early 1970s. The author argues those entrants kept occupying jobs and suppressing demand for new workers until retirement.

AI Summary. Fertility has fallen across modern societies, with tight-knit religious communities such as Israel's ultra-Orthodox and America's Amish remaining exceptions above replacement level. The relationship between income and childbearing has reversed: richer OECD countries once had fewer children, and researchers find higher-income men and more-educated women now have more children.

Jesús Fernández-Villaverde Foreign Affairs
Date Posted:

Across OECD countries, richer members now tend to have higher fertility, even controlling for migration. According to Mexico’s newly released official survey, Mexico’s fertility rate in 2024 was 1.2, versus 1.57 for non-Hispanic white Americans, although Mexican income per capita was only 28% of the US level. Fernández-Villaverde argues that “ultralow fertility seems to be caused not by a lack of desire for children but by the absence of the conditions that would make having children easier, or even possible.”

Has the link between higher income and fewer children reversed?

Core argument: In the United States, economists Moshe Hazan and Hosny Zoabi find that in the first decade of the 2000s, women with a graduate degree had about 2 children, more than the 1.8 of women who stopped at a bachelor's degree.

Tight-knit religious communities, such as the ultra-Orthodox in Israel and the Amish in the United States, have managed to maintain high fertility rates well above replacement level. But these groups have also stayed apart from much of modern life. Apart from these idiosyncratic pockets, modernity has spread around the planet, with fertility falling everywhere. But rates are tumbling unevenly. In 1980, the richer an OECD country, the fewer children its women had. By 2000, the opposite was beginning to become true. The same reversal shows up inside countries. In Sweden, the demographer Martin Kolk has found that in every cohort born between 1940 and 1970, men with higher lifetime incomes have more children, and that among women born since the 1960s, the poorest have the fewest children. In the United States, the economists Moshe Hazan and Hosny Zoabi have found that in the first decade of the twenty-first century, women with a graduate degree had about 2 children, significantly more than the 1.8 for women who stopped at a bachelor’s degree.

Takeaways by Macro Roundup® AI

  1. In the United States, economists Moshe Hazan and Hosny Zoabi find that in the first decade of the 2000s, women with a graduate degree had about 2 children, more than the 1.8 of women who stopped at a bachelor's degree.
  2. The income–fertility relationship across OECD countries reversed: in 1980 richer countries had lower fertility, but by 2000 the opposite was beginning to hold.
  3. In Sweden, demographer Martin Kolk finds that in every cohort born between 1940 and 1970, men with higher lifetime incomes had more children, and among women born since the 1960s, the poorest had the fewest.

Related Articles:

  • Depopulation Globally and in the Asia-Pacific: The Shape of Things to Come — Population aging and fertility below replacement levels are connected to a revolution in family structure in which families grow smaller, fewer people marry, and voluntary childlessness becomes common across countries. As a result, families become less able to bear the demands that may be placed on them.
  • The Demographic Future of Humanity: Facts and Consequences — The authors estimate the world total fertility rate is around 2.17, below the global replacement rate of roughly 2.21, meaning humanity is already below replacement, with fertility and births falling faster than anticipated. They project middle-income countries' fertility may fall below that of rich countries outside East Asia, with emigration compounding population decline.
  • Terra Incognita: The Economics of a Shrinking World — Global fertility is likely below the replacement level needed to keep population constant in the long run, though population momentum from large cohorts of women now having children means world population will keep growing for roughly another 30 years. Unless trends change, it is projected to peak near 9bn around 2056 and then decline.

AI Summary. US consumer prices excluding food and energy rose 0.3% from the prior month, topping estimates for a third straight month, while overall prices rose 0.4% as costs of essentials climbed broadly. On a three-month annualized basis, core inflation ran at 3.75%, the most in more than two years, and 2.69% annualized over six months.

Mark Niquette Bloomberg
Date Posted:

Headline CPI rose .4% m/m in October, while Core CPI rose .3% m/m. Since January, headline CPI is up 3.3%, while average hourly earnings are up 2.3% – an ~1% drop in real wages, driven mostly by food and energy.

Is core inflation accelerating faster than forecasters expected?

Core argument: Core CPI excluding food and energy rose 0.3% from the prior month, topping estimates for a third straight month, while overall prices jumped 0.4% as the cost of essentials climbed across the board, according to Bureau of Labor Statistics data.

The consumer price index, excluding food and energy, rose 0.3% from a month earlier, according to Bureau of Labor Statistics data, topping estimates for a third straight month. Overall prices jumped 0.4% as the cost of essentials climbed across the board. The BLS didn’t publish year-over-year changes because data collection was interrupted last October during the government shutdown. Economists estimated after the release that core inflation would have been around 2.8% if the data were available, which would have been the highest since May. Through October, the core CPI index was up 3.75% on a three-month annualized basis — the most in more than two years — and 2.69% on a six-month annualized basis, according to data compiled by Bloomberg.

Takeaways by Macro Roundup® AI

  1. Core CPI excluding food and energy rose 0.3% from the prior month, topping estimates for a third straight month, while overall prices jumped 0.4% as the cost of essentials climbed across the board, according to Bureau of Labor Statistics data.
  2. The core CPI index was up 3.75% on a three-month annualized basis through October, the most in more than two years, and 2.69% on a six-month annualized basis, according to data compiled by Bloomberg.
  3. The Bureau of Labor Statistics didn't publish year-over-year changes because data collection was interrupted during the government shutdown, and economists estimated after the release that core inflation would have been around 2.8%, which would have been the highest since May.

Related Articles:

  • 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.
  • 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.
  • 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. European listed companies' capital spending relative to sales is approaching a 10-year high, with capital expenditure projected to be €77bn higher in 2028 than in 2025. Utilities account for about 40% (€31bn) of the increase, while defense spending is projected to rise 36%, industrials excluding defense 24% and information technology 78%.

Huw van Steenis Apollo
Date Posted:

The ratio of capex to sales for the Euro STOXX 600 excluding financials is approaching its highest level since the crisis, driven by a spike in defense, industrial and IT spending.

Are utilities, defense and digitization lifting European capital spending?

Core argument: European listed companies are expected to spend €77 billion more on capital expenditure in 2028 than in 2025, with the capex-to-sales ratio approaching a 10-year high after a long period of underinvestment.

European companies are investing again. The capex-to-sales ratio is approaching a 10-year high, and European listed companies are expected to spend €77 billion more on capex in 2028 than in 2025. Utilities alone account for €31 billion, or around 40%, of the increase. Defense capex is expected to rise 36%, industrials excluding defense 24% and information technology 78%. This comes after a long period of underinvestment. Across Europe, higher spending on energy, grids, defense, reshoring, infrastructure and digitalization is now lifting capital intensity.

Takeaways by Macro Roundup® AI

  1. European listed companies are expected to spend €77 billion more on capital expenditure in 2028 than in 2025, with the capex-to-sales ratio approaching a 10-year high after a long period of underinvestment.
  2. Utilities account for €31 billion, or around 40%, of the expected increase in European capital expenditure between 2025 and 2028.
  3. Defense capital expenditure in Europe is expected to rise 36%, industrials excluding defense 24% and information technology 78%, as higher spending on energy, grids, reshoring, infrastructure and digitalization lifts capital intensity.

Related Articles:

  • Economic Size and Economic Power — By manufacturing value added China has the world's largest manufacturing sector, with the US and European Union roughly co-equal and individually smaller; netting out intra-EU trade, the EU is the largest exporter of goods and services and the US a distant third. The author argues all three are vulnerable to weaponized interdependence, with China apparently least so.
  • Capital Is Making a Comeback — Tangible investment in property, factories and equipment fell from 12.5% to 8.5% of private gross domestic product, while intangible investment in intellectual property, software and process knowledge rose from about 11.5% to 16.75%. The author argues demand for tangible capital investment will now have to rise.
  • Carbon Pricing’s Impact on Global Industry Is Quietly Growing — Direct carbon pricing—carbon taxes and emissions trading systems—now covers about 30% of global emissions, with most coverage coming from emissions trading systems in China and the European Union. The EU complements its system with a Carbon Border Adjustment Mechanism that prices carbon on certain high-emitting imports regardless of where they are produced.

AI Summary. Anthropic plans to seek a valuation of about $1.33tn in its initial public offering, below the roughly $1.5tn investors had anticipated and the approximately $2tn figure floated earlier. Some major investors pushed for the lower figure following a steep selloff in artificial-intelligence companies.

Berber Jin and Corrie Driebusch Wall Street Journal
Date Posted:

Anthropic is seeking to raise $61B at a valuation of ~ $1.33T in their upcoming IPO. Alongside the IPO, the firm is raising $26B from large investors, including Google and Advanced Micro Devices.

Is an AI selloff lowering the valuation sought in a major IPO?

Core argument: Anthropic will seek a valuation of roughly $1.33 trillion in its initial public offering, proceeding with its stock-market debut despite concerns that the AI boom is on shaky ground.

Anthropic will seek a valuation of around $1.33 trillion in its initial public offering, forging ahead with its stock-market debut despite concerns that the artificial-intelligence boom is on shaky ground. A week ago, investors anticipated the company to target a valuation around $1.5 trillion, but after the steep selloff in AI companies Thursday, some major investors pushed for it to be lower. Anthropic’s targeted valuation is far below the roughly $2 trillion figure that had been floated months ago.

Takeaways by Macro Roundup® AI

  1. Anthropic will seek a valuation of roughly $1.33 trillion in its initial public offering, proceeding with its stock-market debut despite concerns that the AI boom is on shaky ground.
  2. Investors had expected Anthropic to target a valuation near $1.5 trillion, but some major investors pushed for a lower figure after a steep selloff in AI companies.
  3. Anthropic's targeted $1.33 trillion valuation falls far below the roughly $2 trillion figure floated months earlier.

Related Articles:

  • The Smartest People in AI Believe This Is the World’s Most Important Chart — An internal analysis of 15,000 artificial intelligence research-and-development tasks at Anthropic rated each on a six-level autonomy scale, finding the share where AI performed most of the work under human supervision rose from none a year earlier and 1% in March to 26% by August.
  • Major Investors Are Skeptical Anthropic IPO Can Achieve $1.5 Trillion Valuation — Anthropic has been expected to raise up to $100bn in an initial public offering valuing it near $1.5tn, but three major investors who plan to participate say the valuation will likely need to come down, with one suggesting closer to $1tn. One investor said the company could instead raise around $80bn.
  • 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.

Monday, November 9, 2026

AI Summary. The author argues the AI boom's economic significance lies more in stock market gains than in data center construction, and that the inability to monetize AI investments could end the boom. Simulations using the Federal Reserve's FRB/US model suggest that an end to the buildout plus a roughly 30% market decline would slow growth to about 1.5%, short of recession.

Jason Furman Econvitals
Date Posted:

Furman estimates that the data-center buildout, which began in mid-2024, had raised US GDP by only ~0.3% by 2026Q3, as the equipment is largely imported and the US was already near full employment. Counting AI-driven stock market gains, the effect rises to ~0.6%. If the buildout ended and stocks fell ~30%, growth would slow to ~1.5%.

How would an end to the AI boom affect growth?

Core argument: If the AI data center buildout ended and the stock market fell about 30%, the FRB/US model predicts growth would slow to roughly 1½ percent, short of even a shallow recession.

The data center buildout is set to be among the largest investment expansions in peacetime American history. How different is our economy today because of it? The answer, based on a simulation using the large-scale macroeconomic model used by the Federal Reserve (FRB/US), is not much. The buildout by itself has raised GDP by only about 0.3%, because most of the investment is imported, and imports do not add to U.S. GDP or lower the unemployment rate. The stock market boom that came with it matters more—together they have raised GDP by about 0.6% and lowered the unemployment rate by about 0.3 percentage point.This analysis suggests that the economy could survive less data center buildout just fine. Investment would fall, but so would imports and interest rates, and GDP would be little changed. A broader fall in the stock market would be a bigger deal, The bottom line: so far the AI economy is less a story about data centers than about the stock market—and that is also where the risk is.

Takeaways by Macro Roundup® AI

  1. If the AI data center buildout ended and the stock market fell about 30%, the FRB/US model predicts growth would slow to roughly 1½ percent, short of even a shallow recession.
  2. The economy could withstand less data center buildout, making the AI economy so far less a story about data centers than about the stock market, which is also where the risk lies.
  3. Public policy changes or an inability to monetize AI investments could stop the AI boom, and financial-system complexities such as unwinding leverage, absent from the FRB/US model, pose a tail risk resembling 2001 more than 2007–09.

Related Articles:

  • Change Is Accelerating Because It’s All Interconnected — The authors estimate that artificial intelligence equity valuations discount roughly 3.5% annual productivity growth and trend nominal output growth well above the recent past, while consensus forecasts and broader markets imply growth closer to recent experience. On that basis, either AI stocks or broader macro markets are meaningfully mispriced.
  • The S&P 500 And Cembalest’s “AI Universe” After The Midterms — An "AI universe" index of 42 stocks groups companies into three categories: 28 direct AI firms including NVIDIA, Microsoft, Alphabet, Amazon, Meta and Broadcom; 8 AI-linked utilities such as Vistra, NextEra and Constellation; and 6 capital equipment makers including Eaton, Quanta and GE Vernova.
  • US Labor Productivity Increases at Fastest Pace in a Year — US labor productivity, measured as nonfarm business output per hour, rose at a 3.6% annualized rate, up from an upwardly revised 2.1% pace, while unit labor costs fell 0.7%. The acceleration suggests a capital spending boom is translating into greater efficiency, according to Bureau of Labor Statistics data.

AI Summary. An opinion essay argues that a burst artificial intelligence investment bubble would cause a recession followed by a slow, jobless recovery, as recessions driven by private-sector overreach respond poorly to monetary stimulus. It contends a 4% federal funds rate and political gridlock limit both monetary and fiscal responses.

Paul Krugman Krugman Wonks Out
Date Posted:

Through the early 1980s, US recessions were effectively engineered by the Fed to curb inflation. Later recessions reflected private-sector overreach; two of the three followed burst bubbles, and recoveries were slow because rate cuts are less able to revive spending after a bust. Monetary policy may thus be ill-suited to offset a collapse of the AI bubble.

How would an AI investment bust affect recession and recovery?

Core argument: Paul Krugman cites Bernstein and Cummings’ estimate that an AI bust would deliver a negative shock three times larger than the dot-com bust, noting AI-related tech spending and stock market valuations as shares of GDP exceed 1990s boom levels.

The Nixon, Ford, and Volcker recessions resulted from deliberate Fed tightening to curb high inflation, pushing interest rates to very high levels. Since the 1980s, however, inflation has been much less of a problem. Why, then, have recessions continued? Because of private-sector overreach: overenthusiastic companies and lenders taking excessive risks. The 1990–91 recession followed overinvestment in commercial real estate, fueled by runaway lending by newly (and disastrously) deregulated S&Ls. The 2001 recession followed the collapse of the 1990s tech bubble. The 2007–09 recession, the worst since the Depression, followed the bursting of a housing bubble fueled by effectively unregulated “shadow banks.” If another recession comes soon, AI-industry overreach may be responsible. Tight-money recessions are easy to end: the Fed can simply lower rates and loosen credit. But after a burst bubble, lower rates may not revive borrowing and spending, even before rates hit zero [though in two of the three busts rates did indeed hit zero]. Fiscal stimulus is a heavier lift.

Takeaways by Macro Roundup® AI

  1. Paul Krugman cites Bernstein and Cummings’ estimate that an AI bust would deliver a negative shock three times larger than the dot-com bust, noting AI-related tech spending and stock market valuations as shares of GDP exceed 1990s boom levels.
  2. Krugman argues that recessions caused by private-sector overreach (1990–91, 2001, 2007–09) produce prolonged jobless recoveries, unlike the V-shaped rebounds after Fed tight-money recessions (1969–70, 1973–75, 1980–82), and places an AI bust in the second category.
  3. Krugman states that the 4% federal funds rate limits the monetary response compared with the dot-com bust, when the Fed cut rates 5.5 percentage points from 6.5% to 1%, while political gridlock forecloses fiscal stimulus for at least two years.

Related Articles:

  • Change Is Accelerating Because It’s All Interconnected — The authors estimate that artificial intelligence equity valuations discount roughly 3.5% annual productivity growth and trend nominal output growth well above the recent past, while consensus forecasts and broader markets imply growth closer to recent experience. On that basis, either AI stocks or broader macro markets are meaningfully mispriced.
  • 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.
  • US Labor Productivity Increases at Fastest Pace in a Year — US labor productivity, measured as nonfarm business output per hour, rose at a 3.6% annualized rate, up from an upwardly revised 2.1% pace, while unit labor costs fell 0.7%. The acceleration suggests a capital spending boom is translating into greater efficiency, according to Bureau of Labor Statistics data.

AI Summary. Long-term U.S. Treasury yields did not fall during an artificial-intelligence equity sell-off, which the author argues contradicts the view that AI capital spending and hyperscaler debt issuance are the main force pushing yields higher. The author attributes elevated long-term yields instead to a rising fiscal risk premium tied to U.S. public debt growth.

Robin Brooks Robin Brooks Substack
Date Posted:

Brooks notes that while the 2-year and 10-year Treasury yields fell during last week’s AI sell-off, the 10y10y forward yield did not. He argues its failure to do so “further cements the case for the fiscal risk premium,” concluding that long yields are up “because of mounting fiscal stress, not because of AI capex.”

Are elevated long-term yields driven by fiscal strain rather than AI borrowing?

Core argument: Robin Brooks argues that long-term Treasury yields failed to fall during the late-2026 AI equity sell-off, contradicting the view that AI capital expenditure and hyperscaler debt issuance have been the primary force pushing yields higher.

The black line shows daily data from the start of 2026 for the two-year Treasury yield.The blue line is the 10-year yield and the purple line is the 10y10y forward yield. If the AI bubble were a material driver of the rise in long-term yields, the purple line should have fallen this week alongside the blue and black ones. It didn’t and that in my mind further cements the case for the fiscal risk premium. The midterm elections and the AI sell-off that’s ensued have given us the perfect natural experiment to disentangle what’s going on with long-term yields. They’re up because of mounting fiscal stress, not because of AI. Once the war ends - and it will - we’ll be left with all the structural challenges the US and others in the G10 face. The fact that we’re rapidly running out of fiscal space is top of that list.

Takeaways by Macro Roundup® AI

  1. Robin Brooks argues that long-term Treasury yields failed to fall during the late-2026 AI equity sell-off, contradicting the view that AI capital expenditure and hyperscaler debt issuance have been the primary force pushing yields higher.
  2. The November payrolls print of 165,000 jobs beat the Bloomberg consensus of 70,000 by 95,000, or 1.2 standard deviations against a historical standard deviation of 76,000, and the two-year yield rose five basis points, in line with or above the historical regression of yield responses to payrolls surprises.
  3. Brooks concludes that elevated long-term yields reflect mounting fiscal stress rather than AI, noting the 10-year/10-year forward yield did not decline alongside shorter maturities during the sell-off week and that corporate dissaving is “not remotely near where it was in the IT bubble of the early 2000s.”.

Related Articles:

  • Global Bond Sales Smash Record, Fueled by AI Borrowing Binge — Financial firms, companies and governments raised about $6.61tn through broadly syndicated investment-grade and junk-bond sales, up 15% year-over-year to a record. Cloud-computing giants and data-center developers sold almost $368bn of debt, more than 6x the prior year, accounting for roughly a third of the increase in borrowing.
  • Is the AI Buildout Pushing Up Yields? — US saving-investment data show that non-financial corporations remain net savers, unlike the early-2000s information technology boom when they flipped to net borrowers and their capital spending accounted for the entire current account deficit. Government dissaving through the budget deficit, not the artificial intelligence buildout, is absorbing national resources.
  • The Meaning Of Higher Real Yields — US inflation-protected Treasury yields have broken above their post-2008 highs, indicating the real cost of capital is rising, while nominal 20- and 30-year Treasury yields remain within their three-year ranges. The article argues an artificial-intelligence-driven investment boom has raised demand for capital, and that corporate debt-to-equity ratios have fallen and interest coverage has surged since Covid.

AI Summary. China's leadership interprets weak consumption, slow household income growth, rising unemployment, persistent deflation, and growing external surpluses as acceptable costs of a development model that equates growth with capital accumulation and technology deployment. In this view, higher wages, consumption, and services follow naturally once productive industries mature.

Oliver Melton and Logan Wright Foreign Affairs
Date Posted:

Oliver Melton and Logan Wright note that Zhongnanhai’s push to expand production amid weak consumer demand is entrenching deflation. The current leadership, they argue, views some deflation as a feature of “hard-won efficiency gains” and is not concerned about growing reliance on foreign demand.

Does China view weak consumption and deflation as acceptable development costs?

Core argument: China’s leadership sees the same data—rising external surpluses, weak consumption, slower household income growth, weak credit demand, rising unemployment and underemployment, and persistent deflation—but draws different conclusions about what these developments indicate and what Beijing should do in response.

The party is sticking to this path because the leadership believes it is working. It sees the same troubling data—including rising external surpluses, weak consumption, slower household income growth, weak credit demand, rising unemployment and underemployment, and persistent deflation—but it has reached wildly different conclusions about what these developments indicate and what Beijing should do in response. China’s worldview treats development as equivalent to capital accumulation and sees productivity as determined by the control and deployment of technology. It posits that the growth of the service sector, higher wages, and higher consumption are the consequences of that physical underlying foundation—they follow naturally in later stages of the development process once the productive industries have flourished. The resulting structural imbalance that weakens household income growth, the service sector, and public services was thus not an accident; in China’s economic development theory, this is seen as self-discipline that will pay off with more rapid long-term development.

Takeaways by Macro Roundup® AI

  1. China’s leadership sees the same data—rising external surpluses, weak consumption, slower household income growth, weak credit demand, rising unemployment and underemployment, and persistent deflation—but draws different conclusions about what these developments indicate and what Beijing should do in response.
  2. China’s economic worldview treats development as equivalent to capital accumulation and productivity as determined by the control and deployment of technology, with service-sector growth, higher wages, and higher consumption following once productive industries have flourished.
  3. The structural imbalance weakening household income growth, the service sector, and public services is treated in China’s economic development theory not as an accident but as self-discipline that will pay off with more rapid long-term development.

Related Articles:

  • The Future, Made In China — China's economy runs on parallel tracks: a property crash, a booming high-tech manufacturing sector, and university graduates trained for traditional white-collar jobs entering a labor market geared toward advanced manufacturing. Researchers at Stanford and Harvard found a swing from optimism to pessimism, with about 28% of citizens expecting living standards to improve.
  • China Sees Nearly 10% Decline In Marriages in 2026 So Far, Foreshadowing Lower Birth Rate — China recorded 4.648m marriage registrations in the first nine months of the year, down 504,000 from a year earlier, a nearly 10% decline that points to a full-year drop. Marriages peaked at 13.469m in 2013 and have generally trended downward since, with divorce registrations at 2.082m.
  • The Year of the Trojan Fire Horse: China’s Imbalanced Economy and Unrelenting Mercantilism — About 30% of Chinese industrial companies are unprofitable "zombies" kept alive by subsidies far larger than those elsewhere, rather than exiting amid falling industrial producer prices. Countries with large increases in manufactured imports from China also saw slowdowns in domestic manufacturing, including declining manufacturing shares of output across most of Southeast Asia.

AI Summary. Countries that become dependent on increasingly uneconomic investment have found adjustment difficult, as in Japan, where average GDP growth fell from about 5% to under 1% after 1991 and its share of global manufacturing fell by nearly 60%. Rebalancing requires a larger role for consumption, and absent a sharp rise in consumption growth, it occurs through slower production growth.

Michael Pettis China Financial Markets
Date Posted:

Pettis argues that China faces the same dilemma as Japan after 1991: reducing uneconomic investment requires consumption to become a larger source of demand. But raising household income may undermine manufacturing competitiveness, while China’s higher debt limits its ability to cushion the adjustment.

How costly is rebalancing away from dependence on uneconomic investment?

Core argument: Japan’s average GDP growth fell from around 5% in the decade before 1991 to under 1% in the decade after, while its share of global GDP fell by nearly half between 1991 and 2008.

Every country that has become excessively dependent on increasingly uneconomic investment has found it difficult to begin an adjustment that its leaders knew was necessary. Japan in the 1980s, Brazil in the 1970s, and the Soviet Union in the 1960s all faced versions of this problem. The Japanese experience shows how costly that adjustment can be. Rebalancing meant for Japan, and means for China, increasing the role of consumption in driving GDP growth, and if an economy cannot rebalance through a sharp increase in consumption growth – and historical precedents suggest that this is extremely unlikely – it must, almost by definition, rebalance through slower growth in production. This is especially difficult when the international competitiveness of manufacturing depends on the same distribution of income that constrains consumption. Raising the role of consumption, in that case, requires raising household income relative to production, but this automatically reduces the cost advantages on which manufacturing depends.

Takeaways by Macro Roundup® AI

  1. Japan’s average GDP growth fell from around 5% in the decade before 1991 to under 1% in the decade after, while its share of global GDP fell by nearly half between 1991 and 2008.
  2. Japan’s share of global manufacturing fell by nearly 60% over the broader period, illustrating how costly adjustment can be for an economy dependent on increasingly uneconomic investment.
  3. Rebalancing means raising consumption’s role in driving GDP growth, and since historical precedents suggest a sharp increase in consumption growth is extremely unlikely, China would rebalance through slower growth in production.

Related Articles:

  • Two Asian Giants, One Economic Trap — China's combined public and private debt is estimated at about 300% of GDP, and an updated "Japanisation" index indicates China has scored as more Japanised than Japan for the past five years. Analysts attribute the 1.7% yield on 10-year Chinese government bonds to weak credit demand, with investors parking cash in government debt.
  • Why Global Imbalances Matter — Countries running persistent trade surpluses, such as China, Germany and Japan, have built their economies around an excess supply of tradeable goods and services, leaving them dependent on deficit countries to absorb it. That dependence gives deficit countries bargaining power and exposes surplus countries to pressure to expand domestic demand.
  • Is China’s High-Quality Investment Output Economically Viable? — China's technological progress and infrastructure do not refute claims of overinvestment, since overinvestment often produces real physical assets and technological gains yet still counts as overinvestment when it generates less real value than the resources, subsidies, and transfers it consumes. When such losses are capitalized, assets are carried above their real economic value.

Friday, November 6, 2026

AI Summary. An "AI universe" index of 42 stocks groups companies into three categories: 28 direct AI firms including NVIDIA, Microsoft, Alphabet, Amazon, Meta and Broadcom; 8 AI-linked utilities such as Vistra, NextEra and Constellation; and 6 capital equipment makers including Eaton, Quanta and GE Vernova.

Edward Conard Macro Roundup
Date Posted:

As the probability of a Democrat-controlled Senate rose from 50% in online betting in early September to 100% after the election, the S&P 500 fell 4.7% lead by an 8.9% drop in AI-related stocks and a 1.1% decline in the rest of the market.

How is the AI universe index of stocks composed?

Core argument: Michael Cembalest's "AI universe" comprises 42 stocks across three categories: 28 direct AI names, 8 AI utilities, and 6 AI capital equipment companies.

As the probability of a Democrat-controlled Senate rose from 50% in online betting in early September to 100% after the election, the S&P 500 fell 4.7% lead by an 8.9% drop in AI-related stocks and a 1.1% decline in the rest of the market.

Takeaways by Macro Roundup® AI

  1. Michael Cembalest's "AI universe" comprises 42 stocks across three categories: 28 direct AI names, 8 AI utilities, and 6 AI capital equipment companies.
  2. The 28 direct AI stocks in Cembalest's universe include NVIDIA, Microsoft, Apple, Alphabet, Amazon, Meta, Broadcom, Tesla, Oracle, Palantir, AMD, Salesforce, IBM, Intel, Micron, Dell and Super Micro Computer.
  3. Cembalest's AI universe includes 8 utilities, among them NRG, Vistra, NextEra and Constellation, and 6 capital equipment makers, among them Eaton, Trane, Quanta and GE Vernova.

Related Articles:

  • The Stock Market’s Read On The Midterms, In Its Winners And Losers — Stocks rose broadly after a sweeping Democratic win in midterm elections, with health insurers tied to the Affordable Care Act and solar companies gaining while data-center firms and companies linked to Trump and Musk fell. The move reflects the increment beyond already-priced-in Democratic victories, from greater certainty and a larger-than-expected margin.
  • Califoreboding — A basket of 42 AI stocks accounts for 60%-80% of all S&P 500 earnings growth, price returns and capital spending, while 60% of S&P 500 stocks sit 20% or more below their highs and only 30% outperform the index. AI-related construction spending has risen 38%, the only positive trend as manufacturing, commercial real estate and residential construction decline.
  • One Hundred Years in the U.S. Stock Markets — Over a century, U.S. publicly traded stocks generated roughly $91tn in shareholder wealth enhancement, with returns strongly positively skewed and dominated by a relatively small number of high-performing firms. Because most possible outcomes fall below the mean in a skewed distribution, the authors argue financial planning should focus on median outcomes or the full distribution.

AI Summary. Anthropic has been expected to raise up to $100bn in an initial public offering valuing it near $1.5tn, but three major investors who plan to participate say the valuation will likely need to come down, with one suggesting closer to $1tn. One investor said the company could instead raise around $80bn.

Corrie Driebusch, Berber Jin, Kate Clark and Anissa Gardizy Wall Street Journal
Date Posted:

The WSJ reports that market participants are “increasingly skeptical” that Anthropic’s IPO can proceed at its proposed $1.5T valuation. Some major investors see the valuation falling sharply, perhaps to as low as ~$1T.

Will a leading AI company's IPO valuation fall short of expectations?

Core argument: Anthropic is targeting an IPO the week before Thanksgiving that has been expected to raise up to $100 billion at a valuation of around $1.5 trillion.

Anthropic is aiming to stage the IPO the week before Thanksgiving and has been expected to raise up to $100 billion in an offering that could value the company at around $1.5 trillion. But three major investors who plan to participate in the IPO say the valuation will likely need to come down, with one saying it could be closer to $1 trillion. The company could also decide to raise less money than anticipated, perhaps to around $80 billion, said one investor who plans to participate in the IPO. That same investor hopes for the company to have well over $200 billion on its balance sheet post-IPO. Anthropic had $146.6 billion cash on hand as of Sept. 30.

Takeaways by Macro Roundup® AI

  1. Anthropic is targeting an IPO the week before Thanksgiving that has been expected to raise up to $100 billion at a valuation of around $1.5 trillion.
  2. Three major investors who plan to participate in the Anthropic IPO say the valuation will likely need to come down, with one putting it closer to $1 trillion.
  3. One investor planning to participate says Anthropic could raise less than anticipated, perhaps around $80 billion, and hopes the company holds well over $200 billion on its balance sheet post-IPO, compared with $146.6 billion cash on hand as of Sept. 30.

Related Articles:

  • The Cage Fight for Capital — A slowdown in artificial intelligence financing could become self-reinforcing, as falling stock prices widen credit spreads, which further slows financing. The author argues the S&P 500's roughly 8% gain this year rests on a small number of stocks driven up by competition among deep-pocketed players betting on artificial intelligence.
  • Change Is Accelerating Because It’s All Interconnected — The authors estimate that artificial intelligence equity valuations discount roughly 3.5% annual productivity growth and trend nominal output growth well above the recent past, while consensus forecasts and broader markets imply growth closer to recent experience. On that basis, either AI stocks or broader macro markets are meaningfully mispriced.
  • 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. Ukraine's population in government-controlled territory has fallen from about 37m to 27m–28m since Russia's 2022 full-scale invasion, with 3m–5m living under occupation and millions emigrated. The fertility rate has dropped from 1.2 children per woman to 0.8–0.9, far below the 2.1 replacement rate, and deaths now outnumber births by more than three to one.

Economist Staff The Economist
Date Posted:

Ukraine’s fertility rate has fallen from 1.2 children per woman in 2020 to 0.8–0.9—lower than in any other major country except South Korea. A key driver of the fertility decline is the more than 5 million Ukrainians living abroad, mostly children and women under 44.

How severely has war reduced Ukraine's population and birth rate?

Core argument: Ukraine's population in government-controlled territory has fallen from about 37m to 27m–28m since Russia's full-scale invasion in 2022, with 3m–5m Ukrainians living under Russian occupation and millions more emigrated.

Births in Ukraine are falling, in part because there are fewer adults. Since Russia’s full-scale invasion in 2022 the population inside government-controlled territory has fallen from about 37m to 27m-28m. Around 3m-5m Ukrainians now live under Russian occupation, and millions more have emigrated. Ukraine’s president, Volodymyr Zelensky, puts combat deaths at over 50,000; an independent estimate is closer to 150,000. Thousands of civilians have been killed, and Russia has deported over 20,000 children to Russify them. Wartime, moreover, is not good for starting families. The fertility rate has dropped from 1.2 children per woman in 2020 to 0.8-0.9, lower than any big country but South Korea. The replacement rate, needed to keep the population stable, is 2.1. In the first half of 2026 deaths outnumbered births by more than three to one.

Takeaways by Macro Roundup® AI

  1. Ukraine's population in government-controlled territory has fallen from about 37m to 27m–28m since Russia's full-scale invasion in 2022, with 3m–5m Ukrainians living under Russian occupation and millions more emigrated.
  2. Ukraine's fertility rate has dropped from 1.2 children per woman in 2020 to 0.8–0.9, lower than any big country except South Korea and below the 2.1 replacement rate needed to keep the population stable.
  3. Deaths outnumbered births by more than three to one in Ukraine in the first half of 2026, while President Volodymyr Zelensky puts combat deaths above 50,000 and an independent estimate is closer to 150,000.

Related Articles:

  • 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.
  • How Russia’s Fatalities Compare With Ukraine’s — A model estimates Russian casualties in the full-scale Ukraine war at 1.1m–1.4m, including 230,000–430,000 dead, equivalent to roughly one in 25 Russian men aged 18–49 killed or severely wounded. One estimate puts Ukrainian casualties at 600,000 with 100,000–140,000 dead—lower in absolute terms but a higher share of its population.

AI Summary. China recorded 4.648m marriage registrations in the first nine months of the year, down 504,000 from a year earlier, a nearly 10% decline that points to a full-year drop. Marriages peaked at 13.469m in 2013 and have generally trended downward since, with divorce registrations at 2.082m.

Mandy Zuo South China Morning Post
Date Posted:
Is Database:
Database

The number of marriages in China fell ~10% y/y to ~4.6mm in the first three quarters of this year, after rising 10.8% to ~6.8mm in 2025. The number of marriages peaked in 2013 at 13.5mm, and the most recent trough was 6.1mm in 2024.

Are marriages in China declining again after last year's rebound?

Core argument: China recorded 4.648 million marriage registrations in the first nine months of 2026, down 504,000 from a year earlier, a decline of nearly 10%, according to Ministry of Civil Affairs data.

China has witnessed a nearly 10% drop in the number of marriages in the first three quarters of the year, signalling a possible full-year fall in 2026 after a rebound in 2025. The country recorded 4.648 million marriage registrations in the first nine months, down 504,000 from a year earlier, data released by the Ministry of Civil Affairs showed. The latest figures mean that 2026 marriage registrations would most likely see a year-on-year drop as well, said He Yafu, an independent demographer based in Guangdong province. Based on the historical share of annual marriage registrations recorded in each quarter, he estimated that nationwide marriages for the entire year would range from 5.88 million to 6.46 million couples. Even if registrations reached the upper end of that forecast, they would still be lower than the 2025 level.

Takeaways by Macro Roundup® AI

  1. China recorded 4.648 million marriage registrations in the first nine months of 2026, down 504,000 from a year earlier, a decline of nearly 10%, according to Ministry of Civil Affairs data.
  2. Independent demographer He Yafu estimates full-year 2026 marriages at 5.88 million to 6.46 million couples, below the 6.765 million recorded in 2025, when registrations rose 10.8%, boosted by auspicious dates, a new nationwide registration service and local incentives.
  3. China’s marriage registrations peaked at 13.469 million in 2013, fell below 10 million in 2019 and dropped to 6.1 million in 2024, a record low since the data was first published, while divorce registrations in the first nine months of 2026 reached 2.082 million, up 5,000 year-on-year.

Related Articles:

  • Why China’s Women Are Having Fewer Babies — In China, about 30% of 30-year-olds were unmarried in 2023, up from 14.5% a decade earlier, while the share of 40-year-olds who were divorced roughly doubled from 2.6% to 5%. Women have outnumbered men in Chinese undergraduate and postgraduate programs since 2009, even as men outnumber women nationally.
  • Depopulation Globally and in the Asia-Pacific: The Shape of Things to Come — Population aging and fertility below replacement levels are connected to a revolution in family structure in which families grow smaller, fewer people marry, and voluntary childlessness becomes common across countries. As a result, families become less able to bear the demands that may be placed on them.
  • The Power of Demography and the Fate of East Asia — East Asia's total population has peaked and is projected to decline for at least a generation, with the pace of decline likely accelerating each decade, while US population is projected to keep growing for decades. The author argues such sustained divergence can shift the global balance of power.

AI Summary. An estimated 7.2m Chinese Communist Party members have been punished since 2012, including at least 632 officials at or above vice-ministerial rank, with disciplinary actions reaching a record 983,000 cadres in one year. Analysts argue the campaign encourages officials to filter information upward and increases risk aversion that could slow project execution and weaken fiscal stimulus.

Joe Leahy and Edward White Financial Times
Date Posted:

~25% of Central Committee members were absent from the last plenum due to Xi’s purges. The escalating anti-corruption campaign may be weakening state capacity, as lower-level cadres are “too scared or unwilling to tell [Zhongnanhai] the true picture about social or economic challenges.”

Does a sweeping party purge slow economic decision-making and stimulus?

Core argument: Minxin Pei of Claremont McKenna College calculates that roughly 7.2mn CCP members have been punished politically, administratively, or judicially since 2012, including at least 632 officials at or above vice-ministerial rank.

This Monday, in an article under [Xi’s] own byline in the mass-circulation People’s Daily — a rare occurrence — the president suggested there was some way to go. He wrote of how, while living in a “cave dwelling” in 1945, Mao had suggested letting the Chinese people supervise the party. Mao saw this idea, which he called “democracy”, as a means of preventing dynastic rule, says David Bandurski of the China Media Project. Xi added that the party had arrived at a second answer during his own rule — “self-revolution”, the party’s supervision of itself — to maintain its “advanced nature and purity” and achieve “self-renewal”. The danger is that the policy will backfire by creating the incentive for cadres to inform on their peers, decimating the ranks for little return, analysts say.

Takeaways by Macro Roundup® AI

  1. Minxin Pei of Claremont McKenna College calculates that roughly 7.2mn CCP members have been punished politically, administratively, or judicially since 2012, including at least 632 officials at or above vice-ministerial rank.
  2. Disciplinary actions averaged more than 800,000 cadres per year in Xi Jinping's third term and reached a record 983,000 in 2024, against an average of 145,800 per year during Hu Jintao's second term, with criminal prosecutions averaging about 75,000 officials annually.
  3. China's score on Transparency International's Corruption Perceptions Index moved from 39 in 2012 to 43 in 2025, against a global average of 42, with scores below 50 indicating serious corruption problems.

Related Articles:

  • China Tightens Control Of Overseas Travel In Sweeping New Law — China has imposed new legal controls on overseas travel that formalise restrictions on mid-to-senior civil servants, Communist Party cadres, state-owned enterprise employees, and private citizens working in sensitive areas, as part of efforts to protect state secrets, advanced technology, and highly skilled workers. Violators face steep fines and exit bans ranging from three months to indefinite.
  • The Future, Made In China — China's economy runs on parallel tracks: a property crash, a booming high-tech manufacturing sector, and university graduates trained for traditional white-collar jobs entering a labor market geared toward advanced manufacturing. Researchers at Stanford and Harvard found a swing from optimism to pessimism, with about 28% of citizens expecting living standards to improve.
  • China’s Growth Machines — The United States generates almost twice as much economic output per dollar invested as China, the opposite of what would be expected from a mature developed economy versus a fast-growing economy catching up. The gap points to overexuberance in Chinese investment.