Edward Conard

Top Ten New York Times Bestselling Author

  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…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
  • “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
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard 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
  • “…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 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
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Wednesday, November 6, 2024

AI Summary. Election data show the Republican candidate improved on his prior presidential margin in nearly 90% of US counties, with rural turnout strong and urban support for the Democratic candidate falling short. Exit polls indicate Asian, Black, Hispanic, and white voters all shifted toward him, while the Democrat gained only among voters over 65 and white college-educated women.

Eva Xiao, Sam Learner, Oliver Roeder, Clara Murray, et al. Financial Times
Date Posted:

Exit poll analysis by Catalist and Edison Research finds 18-19pp shifts toward Trump vs. 2020 among Hispanic and Asian voters, while over-65s and white college-educated women showed 4pp shifts toward Harris.

Did the Republican gain across nearly all counties and demographic groups?

Core argument: Trump improved on his 2020 margin in almost 90% of US counties, with rural turnout favoring him while urban voters did not deliver strongly enough for Harris.

Across the US, the data shows urban voters did not come through strongly enough for Harris, while people in rural areas turned out for Trump. He improved on his 2020 margin in almost 90% of counties nationwide. The Republican candidate gained support among huge swaths of the electorate compared with 2020, according to exit poll data. Asian, Black, Hispanic, and white voters all moved towards Trump. Harris only increased her vote share among the over-65s and with white college-educated women.

Takeaways by Macro Roundup® AI

  1. Trump improved on his 2020 margin in almost 90% of US counties, with rural turnout favoring him while urban voters did not deliver strongly enough for Harris.
  2. Exit poll data show Asian, Black, Hispanic, and white voters all shifted toward Trump compared with 2020.
  3. Harris increased her vote share only among voters over 65 and white college-educated women.

Related Articles:

  • The Road to A Political Realignment in American Politics — College-educated voters are now more likely to identify as Democrats while those without degrees back Republicans, with educational attainment increasingly correlated with views on abortion, LGBTQ+ rights, and religion's relationship to government. This sorting leaves most states politically uncompetitive, with eight states near the national average in education levels holding 97 electoral votes in play.
  • Progressives Beware: High Turnout Now Favours The Right — In US elections from the 1960s to 2000, higher turnout tended to favor Democrats because habitual voters were disproportionately wealthy and well-educated, while occasional voters came from lower socio-economic groups. That gradient has reversed as economically marginalised voters shifted rightward: lower-turnout, graduate-heavy electorates now tend to help Democrats.
  • American Politics Is Undergoing A Racial Realignment — National election surveys and Gallup polling show the Democratic Party's advantage among Black, Latino, and Asian voters at its lowest level since 1960. The article argues this shift reflects fading civil rights-era ties, a weakening link between income and party choice, and non-white voters with long-held conservative views aligning their votes with those views.

AI Summary. Tariffs during Trump's first term had no noticeable effect on inflation because they were relatively modest and coincided with subdued global demand, weak investment, and slack labor markets. Proposed tariffs of at least 60% on China and 10%–20% elsewhere would lift US tariff rates to their highest since the 1930s amid brisk demand, making them a greater inflation risk.

Greg Ip Wall Street Journal
Date Posted:

.@greg_ip argues that Trump’s proposed tariff and tax cut policies would put upward pressure on inflation and interest rates. As evidence, he cites the rise of 10-year Treasury yields alongside Trump’s polling.

Are higher tariffs a bigger inflation risk when demand is strong?

Core argument: Trump has proposed tariffs of at least 60% on China and 10–20% on all other trading partners, a combination that would lift U.S. tariff rates to their highest since the 1930s.

Trump’s first-term tariffs had no noticeable effect on inflation because they were relatively modest, and globally subdued demand and investment and slack labor markets were pushing in the opposite direction. On the eve of his election, wages were rising just 2.4% a year. Bond investors expected future inflation to average 1.8%, below the Fed’s 2% target. This time Trump has proposed much higher tariffs—at least 60% on China, and 10% to 20% on everyone else. Such a combination would lift U.S. tariff rates to their highest since the 1930s. And it would come when demand is brisk, supply chains are vulnerable to geopolitical conflict, and memories of inflation are fresh. Wages are growing 3.8% a year, and bonds see future inflation at 2.3%. This suggests tariffs could pose more of an inflation risk than in his first term.

Takeaways by Macro Roundup® AI

  1. Trump has proposed tariffs of at least 60% on China and 10–20% on all other trading partners, a combination that would lift U.S. tariff rates to their highest since the 1930s.
  2. Trump's first-term tariffs had no noticeable effect on inflation because they were relatively modest, while subdued global demand and investment and slack labor markets pushed in the opposite direction.
  3. Wage growth of 3.8% a year and bond-market inflation expectations of 2.3% compare with 2.4% and 1.8% on the eve of Trump's first election, suggesting tariffs could pose more of an inflation risk than in his first term.

Related Articles:

  • US Fiscal Outlook Starting to Play a Role for Long-Term Interest Rates — Long-term US interest rates are rising even as markets price in five Federal Reserve rate cuts over the coming 12 months and oil prices fall, disconnecting long rates from those drivers. This pattern suggests long rates are being pushed up by emerging concerns about US fiscal sustainability.
  • US Interest Burden Hits 28-Year High, Escalating Political Risk — US Treasury net interest payments reached $882bn in a fiscal year, equal to 3.06% of gross domestic product — the highest ratio since 1996 — and about 18% of federal revenues. The net interest bill exceeded Defense Department spending on military programs for the first time.
  • C’est la vie: Bond Vigilantes Are Back — France's government bond yield spread widened by 0.29 percentage points, more than Italy's 0.22 and Spain's 0.2, which the authors attribute to political uncertainty created by the calling of a snap national election. The French spread has remained elevated, while the Italian and Spanish spreads have come down.

AI Summary. China imposed sanctions on Skydio, the largest US drone maker and a supplier to Ukraine's military, barring Chinese firms from supplying it with critical components including batteries from its sole provider. The company is seeking alternative suppliers and has asked the US government for help.

Demetri Sevastopulo, Kathrin Hille, and Ryan McMorrow Financial Times
Date Posted:

Skydiom, the largest US drone maker, is facing a supply chain crisis after Beijing banned Chinese groups from providing it with critical components. CEO Adam Bry noted, “This is an attempt to eliminate the leading American drone company.”

Can a US drone maker keep producing without Chinese components?

Core argument: Beijing sanctioned Skydio, the largest US drone maker and a supplier to Ukraine's military, barring Chinese groups from supplying it critical components and blocking batteries from its sole provider.

Skydio, the US’s largest drone maker and a supplier to Ukraine’s military, faces a supply chain crisis after Beijing imposed sanctions on the company, including banning Chinese groups from providing it with critical components. Skydio is rushing to find alternative suppliers after Beijing’s move, which also blocks battery supplies from its sole provider, said people familiar with the situation. The drone maker has sought help from the Biden administration. The Chinese action comes as the US Congress considers legislation that would ban Americans from flying drones made by DJI, the Shenzhen-based company that dominates the global commercial drone industry. “We suspect Skydio was targeted by Beijing because it is likely seen as a competitor to DJI,” said one US official. “If there is a silver lining, we can use this episode to accelerate our work to diversify drone supply chains away from . . . China.”

Takeaways by Macro Roundup® AI

  1. Beijing sanctioned Skydio, the largest US drone maker and a supplier to Ukraine's military, barring Chinese groups from supplying it critical components and blocking batteries from its sole provider.
  2. Skydio is rushing to find alternative suppliers and has sought help from the Biden administration after the Chinese sanctions triggered a supply chain crisis.
  3. One US official said Skydio was suspected of being targeted because Beijing likely sees it as a competitor to DJI, as the US Congress considers legislation banning Americans from flying DJI drones.

Related Articles:

  • US Efforts to Contain Xi’s Push for Tech Supremacy Are Faltering — Research by Bloomberg Economics and Bloomberg Intelligence finds that of 13 key technologies tracked, China has reached global leadership in five and is catching up in seven others, with clear leads in electric vehicles, automotive software and lithium battery technology. China still struggles to develop manufacturing processes for advanced semiconductors, the main focus of US export controls.
  • Mystery Drones Swarmed a U.S. Military Base for 17 Days. The Pentagon Is Stumped — Unidentified drones flew over a U.S. military base for 17 days in a coordinated pattern of higher-altitude fixed-wing aircraft and smaller quadcopters below, leading U.S. officials to doubt hobbyists were responsible. Federal law bars the military from shooting down drones near domestic bases absent an imminent threat.
  • Pentagon Plan to Buy Thousands of Drones Faces Looming Snags — The US Department of Defense aims to buy thousands of low-cost drones within as little as 18 months and up to 2,000 larger uncrewed jets, while one of its primary drone suppliers produced 38 aircraft last year. Booming commercial aerospace demand has left shortages of skilled labor, raw materials, and parts such as advanced electronics and fasteners.

AI Summary. Bloomberg Economics says US tariffs of up to 60% on Chinese goods would decimate trade between the two largest economies, on top of tightened export controls on advanced technology. China has expanded its retaliatory toolkit to include export controls on critical raw materials, agricultural tariffs, and an entity list targeting American companies.

Bloomberg Staff Bloomberg
Date Posted:

Trump’s 60% tariff on Chinese goods would impact $500B in exports to the US, 15% of the value of all Chinese exports. China may respond with “export controls on critical raw materials,” and “an entity list that can target key American companies.”

Is China better prepared to retaliate against steep US tariffs?

Core argument: Trump has threatened tariffs of up to 60% on Chinese goods, a level Bloomberg Economics says will decimate trade between the world's biggest economies, on top of export controls on advanced technology that the Biden administration has tightened.

Trump has threatened to put tariffs of as much as 60% on Chinese goods, a level that Bloomberg Economics says will decimate trade between the world’s biggest economies. That’s on top of a range of export controls on advanced technology that the Biden administration has only tightened since Trump left office. In that time, China has taken strategic steps to ensure it’s more resilient and well positioned to strike back. Key to that has been expanding its toolkit, which now includes export controls on critical raw materials, in addition to tariffs on agricultural goods and an entity list that can target key American companies. Last year, Chinese companies exported $500 billion in goods to the US, or about 15% of the value of all its exports. If the US were to put high tariffs on all or much of those products, it could wipe out those sales and further hurt firms facing a weak domestic economy and falling prices.

Takeaways by Macro Roundup® AI

  1. Trump has threatened tariffs of up to 60% on Chinese goods, a level Bloomberg Economics says will decimate trade between the world's biggest economies, on top of export controls on advanced technology that the Biden administration has tightened.
  2. Chinese companies exported $500 billion in goods to the US last year, about 15% of the value of all Chinese exports, sales that high US tariffs could wipe out while firms face a weak domestic economy and falling prices.
  3. China has expanded its toolkit to include export controls on critical raw materials, tariffs on agricultural goods, and an entity list that can target key American companies.

Related Articles:

  • Fiscal, Macroeconomic, and Price Estimates of Tariffs Under Both Non-Retaliation and Retaliation Scenarios — The authors estimate the modeled tariff proposals would raise $1.2tn–$4.4tn over 10 years, or 0.3–1.2% of average GDP, with foreign retaliation cutting that revenue by 12–26%. They project consumer prices initially rise 1.2–5.1%, equal to $1,900–$7,600 of lost disposable income per household, with real GDP contracting 0.5–1.4% in the medium term.
  • EU to Impose Tariffs Up to 45% on Chinese Electric Vehicles — The European Union voted to impose tariffs of up to 45% on electric vehicles made in China, lasting five years, with China vowing to protect its companies. Chinese-made electric cars rose from around 3% to more than 20% of EU electric vehicle sales over three years, with Chinese brands accounting for about 8%.
  • Trade Intervention for Freer Trade — The authors argue the United States should counter surplus countries' trade policies either by restricting their goods exports through tariffs or by restricting their capital inflows through taxes, volume limits, reserve requirements, transaction approvals, or investor eligibility rules. They contend capital controls are a more targeted alternative to uniform tariffs, which impose equal costs on more and less mercantilist countries.

AI Summary. Because most US corporate profits in China are turned over to the government, which for years invested them in US government and agency debt, the US could settle much of its trade deficit with debt rather than equity. Middle Eastern trading partners instead prefer equity stakes, and overpayment has served as a tactic to overcome political obstacles to such deals.

Brandon Adams Brandon's Newsletter
Date Posted:

America’s deteriorating net international investment position will drive a dramatic transfer of American assets to foreigners. @badams78 argues this will likely “accelerate over time” and suggests foreigners will “prefer equity when they can get it.”

Does the US pay for its trade deficit with debt or equity?

Core argument: Congress blocked Dubai World's 2006 bid for six American ports, while a 2007 deal to invest $5 billion in MGM's City Center went through.

For a long time, our desire to give IOUs rather than equity in payment for our trade deficit was aided by the fact that the majority of our trade deficit was with China. In China, the vast majority of corporate profits are turned over to the government, and for many years the government was happy to invest these profits in US govt securities and US agency debt. Our Middle Eastern trading partners prefer equity when they can get it. A Dubai World deal to buy six American ports was blocked by Congress in 2006 but a 2007 deal to invest $5 billion in MGM’s City Center went through. Overpayment has proved a valuable tactic to overcome political obstacles, as in the recent LIV Tour expansion. The move by the NFL, which will allow private equity firms to buy stakes in NFL teams, can be viewed similarly; foreigners will invest in PE firms that will then overpay for NFL ownership pieces.

Takeaways by Macro Roundup® AI

  1. Congress blocked Dubai World's 2006 bid for six American ports, while a 2007 deal to invest $5 billion in MGM's City Center went through.
  2. The US ability to pay for its trade deficit with IOUs rather than equity was aided by China holding the majority of that deficit, with Chinese corporate profits turned over to the government and invested in US government securities and agency debt.
  3. Middle Eastern trading partners prefer equity when they can get it, and overpayment has proved a valuable tactic for overcoming political obstacles, as in the LIV Tour expansion and the NFL's move to let private equity firms buy stakes in teams.

Related Articles:

  • The End of Privilege: A Reexamination of the Net Foreign Asset Position of the United States — The authors document that the U.S. net foreign asset position fell by 60 percentage points of U.S. gross domestic product between 2007 and 2021, even as U.S. current account deficits narrowed. They attribute this to a boom in the market valuation of U.S. corporations' non-financial assets, which mechanically raised the value of large foreign equity holdings in U.S. firms.
  • Sucking The World Dry (The US Dependence on Foreign Inflows) — The author argues that negative net national savings means the United States is consuming capital rather than accumulating it, largely by selling capital stock to foreigners and spending the proceeds and by not replacing aging capital. With a negative net international investment position, the author contends U.S. spending depends on continued foreign inflows and that potential growth is declining.
  • United States’ Changing Net IIP — The United States' net international investment position deficit—the gap between foreign-owned US assets and US-owned foreign assets—is the largest on record and has turned negative across all major asset categories. Because much of the liability is equity, the author argues rebalancing could come through a correction in US equity values rather than a weaker dollar.

Thursday, November 7, 2024

AI Summary. The author argues that standard Consumer Price Index measures overstate inflation—by roughly 0.70 percentage points a year for the unchained series and about 0.40 points for chained indexes—and constructs an alternative index for gauging long-term trends in income, earnings, poverty, and wealth. The correction adjusts for substitution, new products, quality change, and new outlets.

Scott Winship American Enterprise Institute
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.@swinshi proposes a new price index to remove biases that overstate cost of living increases and finds that from 1979 to 2021 real market income for a middle-quintile household with children increased 59.9% vs. 35.3% under PCEPI and 12.4% under CPI-U.

Do standard consumer price indexes overstate inflation?

Core argument: Available evidence suggests the CPI-U and the retroactive series using current methods overstate inflation by about 0.70 percentage points per year, while the chained indexes are upwardly biased by roughly 0.40 points per year.

The available evidence suggests that the contemporary CPI-U and R-CPI-U-RS [Consumer Price Index retroactive series using current methods] overstate inflation by around 0.70 percentage points per year, while the chained indexes are upwardly biased by roughly 0.40 points per year. I turn to the creation of a new, more accurate price index for assessing long-term trends in income, earnings, poverty, and wealth. My goal is to use the best estimates of year-to-year changes in prices to the extent I can, but to adjust the estimates from different periods in accord with the research on known biases affecting different indexes at different times. My correction amounts to 1.12 points per year relative to the CPI-U from 1978 to 2000. For 2000-2023 I begin with the published 2023 value and then reduce the year-to-year changes by 0.41 percentage points. This adjustment accounts for bias due to upper-level substitution, new products, quality change, and new outlets. Compared with the published CPI-U, my correction from 2000 to 2023 is 0.68 points per year.

Takeaways by Macro Roundup® AI

  1. Available evidence suggests the CPI-U and the retroactive series using current methods overstate inflation by about 0.70 percentage points per year, while the chained indexes are upwardly biased by roughly 0.40 points per year.
  2. The proposed "More Accurate Consumer Price Index" applies a correction of 1.12 percentage points per year relative to the CPI-U for 1978–2000 and 0.68 points per year for 2000–2023.
  3. For 2000–2023 the new index starts from the published 2023 value and reduces year-to-year changes by 0.41 percentage points to account for bias from upper-level substitution, new products, quality change, and new outlets.

Related Articles:

  • The Cost of Thriving Has Fallen: Correcting and Rejecting the American Compass Cost of Thriving Index — The authors recalculate the Cost of Thriving Index and estimate the cost of supporting a family on one male earner's wages rose by just over 10 weeks of work rather than 22 weeks. Accounting for federal taxes—including the child tax credit—and quality improvements in health care and cars, they estimate the cost is now lower than in 1985.
  • Understanding Trends in Worker Pay over the Past 50 Years — Productivity growth has been unequal across industries, across firms within industries, and across workers within firms, slowing growth in both the productivity and the pay of the median worker. The authors argue that working- and middle-class men earlier received "breadwinner rents"—pay above their marginal value to employers—and then endured slow wage growth as women's workforce participation rose.
  • America is Still Working — US hours worked per person fell 7% between 2000 and 2022, a decline attributable entirely to the employment rate falling from 70% to 65%. Hours now sit roughly at their level in the first years after World War II, 23% below 1900.

AI Summary. Early results showed a nationwide rightward shift in U.S. presidential voting, with Trump improving on his prior margin in 2,367 counties and losing ground in only 240, while 536 counties had too few votes counted to include. Several states the Democratic nominee led still shifted right.

Matthew Bloch, Keith Collins, Robert Gebeloff, et al. New York Times
Date Posted:

A New York Times analysis of reported results as of Wednesday shows that over 90% of counties shifted towards Trump relative to 2020.

Did voting shift rightward across nearly all U.S. counties?

Core argument: Mr. Trump improved on his 2020 margin in 2,367 counties, while his margin decreased in only 240 counties, according to early results.

Mr. Trump improved on his 2020 margin in 2,367 counties. His margin decreased in only 240 counties. There were 536 counties where too few votes had been counted to be included in the analysis. Support for Mr. Trump over his three consecutive presidential runs has swayed back and forth, but early results showed that even a number of states where Vice President Kamala Harris was ahead had shifted right.

Takeaways by Macro Roundup® AI

  1. Mr. Trump improved on his 2020 margin in 2,367 counties, while his margin decreased in only 240 counties, according to early results.
  2. Early results showed a rightward shift even in a number of states where Vice President Kamala Harris was ahead.
  3. The analysis excluded 536 counties where too few votes had been counted, and support for Mr. Trump across his three consecutive presidential runs has swayed back and forth.

Related Articles:

  • How Trump Won In Maps and Charts — Election data show the Republican candidate improved on his prior presidential margin in nearly 90% of US counties, with rural turnout strong and urban support for the Democratic candidate falling short. Exit polls indicate Asian, Black, Hispanic, and white voters all shifted toward him, while the Democrat gained only among voters over 65 and white college-educated women.
  • Democrats Join 2024’s Graveyard of Incumbents — Incumbent governing parties lost vote share in all 10 major countries tracked by the ParlGov research project that held national elections in the same year, the first such sweep in almost 120 years of records. The Democratic presidential ticket's popular-vote share fell nearly four percentage points, the steepest drop in Democratic support since 1980.
  • The Shattering of the Democratic Coalition — The Democratic presidential margin among women narrowed from 12 points to 7 while the Republican margin among men widened from 5 points to 10, leaving the overall gender gap unchanged at 17 points. Women under 30 shifted 14 points toward Republicans and men under 30 shifted 29 points.

AI Summary. Incumbent governing parties lost vote share in all 10 major countries tracked by the ParlGov research project that held national elections in the same year, the first such sweep in almost 120 years of records. The Democratic presidential ticket's popular-vote share fell nearly four percentage points, the steepest drop in Democratic support since 1980.

John Burn-Murdoch Financial Times
Date Posted:

.@jburnmurdoch argues that the 3.7% vote share loss by US Democrats, and even greater losses by incumbents in other rich countries, is a reaction to levels of inflation and immigration that haven’t been seen in decades.

Did incumbent parties lose vote share in every major country holding elections?

Core argument: Kamala Harris won almost four percentage points less of the popular vote than Joe Biden did in 2020, the steepest drop in Democratic support since 1980.

At the time of writing, vice-president Kamala Harris has won almost four percentage points less of the popular vote than President Joe Biden did in 2020, the steepest drop in Democratic support since 1980. Economic and geopolitical conditions of the past year or two have created arguably the most hostile environment in history for incumbent parties and politicians across the developed world. From America’s Democrats to Britain’s Tories, Emmanuel’s Macron’s Ensemble coalition to Japan’s Liberal Democrats, even to Narendra Modi’s erstwhile dominant BJP, governing parties and leaders have undergone an unprecedented series of reversals this year. The incumbents in every single one of the 10 major countries that have been tracked by the ParlGov global research project and held national elections in 2024 were given a kicking by voters. This is the first time this has ever happened in almost 120 years of records.

Takeaways by Macro Roundup® AI

  1. Kamala Harris won almost four percentage points less of the popular vote than Joe Biden did in 2020, the steepest drop in Democratic support since 1980.
  2. Incumbents in all 10 major countries tracked by the ParlGov global research project that held national elections in 2024 lost ground with voters, the first time this has happened in almost 120 years of records.
  3. Governing parties across the developed world suffered reversals in 2024, from America's Democrats and Britain's Tories to Emmanuel Macron's Ensemble coalition, Japan's Liberal Democrats and Narendra Modi's BJP.

Related Articles:

  • 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%.
  • Has Pay Kept Up With Inflation? — All four measures of typical and aggregate pay have grown since 2019 when adjusted using the personal consumption expenditures price index, but show smaller increases in three measures and a decline in one when adjusted using the consumer price index. This pattern of smaller gains under consumer price index adjustment holds across time periods.
  • How Immigration Remade the U.S. Labor Force — The Congressional Budget Office estimates more than 9m people have migrated on net to the U.S. in recent years, nearly matching the prior decade's total and lifting population growth to almost 1.2% a year. Fewer than 30% are lawful permanent residents; without immigration, growth would be 0.2%.

AI Summary. The Democratic presidential margin among women narrowed from 12 points to 7 while the Republican margin among men widened from 5 points to 10, leaving the overall gender gap unchanged at 17 points. Women under 30 shifted 14 points toward Republicans and men under 30 shifted 29 points.

Ruy Teixeira The Liberal Patriot
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Ruy Teixeira notes that according to AP VoteCast data, the 17pp overall gender gap was unchanged from 2024. “The gender gap did widen among young voters, but it was because young men moved more sharply toward Trump than young women did.”

Did the gender gap widen as Democrats lost ground with women?

Core argument: Harris won women by 7 points in 2024 versus Biden's 12-point margin in 2020, while Trump's margin among men widened to 10 points from 5 points, leaving the overall gender gap unchanged at 17 points.

Contrary to much pre-election discussion, Harris’s margin among women was actually less than Biden’s in 2020, 7 points for Harris vs. 12 points for Biden. And the Trump margin was better among men, 10 points vs. 5 points in 2020. The overall gender gap went from 17 points in 2020 to….17 points in 2024. The Democrats invested so much hope in the women’s vote, especially the idea that the abortion issue would spike their margin among women, and it just did not pan out. Even more startling, Democrats believed with an almost religious fervor that young women would move sharply in their direction given liberal trends among this demographic and, again, the salience of the abortion issue. It did not happen. Women under 30 supported Biden by 32 points in 2020 but supported Harris by just 18 points in this election, a 14-point shift toward Trump. Among young men, the swing was even harder: these voters supported Biden by 15 points in 2020 but supported Trump by 14 points in 2024. That’s a 29-point pro-Republican swing.

Takeaways by Macro Roundup® AI

  1. Harris won women by 7 points in 2024 versus Biden's 12-point margin in 2020, while Trump's margin among men widened to 10 points from 5 points, leaving the overall gender gap unchanged at 17 points.
  2. Women under 30 backed Biden by 32 points in 2020 but Harris by only 18 points in 2024, a 14-point shift toward Trump.
  3. Men under 30 swung 29 points toward Republicans, moving from a 15-point Biden margin in 2020 to a 14-point Trump margin in 2024.

Related Articles:

  • How Trump Won In Maps and Charts — Election data show the Republican candidate improved on his prior presidential margin in nearly 90% of US counties, with rural turnout strong and urban support for the Democratic candidate falling short. Exit polls indicate Asian, Black, Hispanic, and white voters all shifted toward him, while the Democrat gained only among voters over 65 and white college-educated women.
  • Post-Pandemic Recovery for America’s Prime Age Labor Force: A Tale of Two Sexes — Prime-age women's labor force participation climbed about 5 points above its pre-pandemic level over a decade, while prime-age men's rose barely a point, only just regaining pre-pandemic levels. Despite economic expansion and labor shortages, work rates for prime-age American men are barely as high as at the trough of the severe Reagan-era recession.
  • Democrats Join 2024’s Graveyard of Incumbents — Incumbent governing parties lost vote share in all 10 major countries tracked by the ParlGov research project that held national elections in the same year, the first such sweep in almost 120 years of records. The Democratic presidential ticket's popular-vote share fell nearly four percentage points, the steepest drop in Democratic support since 1980.

AI Summary. The 10-year US Treasury has behaved strangely following Federal Reserve easing, partly because inflation expectations have risen again. If deportations reverse wage growth for the lowest-paid quartile, or other policies prove inflationary, the Federal Reserve may reconsider easing, making the 10-year yield the key gauge of tariffs and deregulation.

Michael Cembalest J.P. Morgan
Date Posted:

Michael Cembalest notes the 10-year Treasury has been rising in a cutting cycle as the market anticipates the Fed’s response to a “tariff/deportation/loose fiscal agenda.”

Is the 10-year Treasury yield the key gauge of new policies?

Core argument: The 10-year US Treasury has behaved strangely in the wake of Fed easing, partly because inflation expectations have been rising again.

The 10-year US Treasury has already been behaving very strangely in the wake of Fed easing. Part of the reason: inflation expectations have been rising again. If deportations cause a U-turn in the lowest quartile of wage growth, or if Trump’s other plans prove to be inflationary, the Fed may have to reconsider its easing plans. The most important indicator to watch will be the 10-year Treasury, a bellwether for Trump’s tariff/deportation/loose fiscal agenda vs the supply side benefits of a less regulated economy.

Takeaways by Macro Roundup® AI

  1. The 10-year US Treasury has behaved strangely in the wake of Fed easing, partly because inflation expectations have been rising again.
  2. If deportations cause a U-turn in the lowest quartile of wage growth, or if Trump's other plans prove inflationary, the Fed may have to reconsider its easing plans.
  3. The 10-year Treasury is the most important indicator to watch, serving as a bellwether for Trump's tariff, deportation, and loose fiscal agenda versus the supply-side benefits of a less regulated economy.

Related Articles:

  • US Fiscal Outlook Starting to Play a Role for Long-Term Interest Rates — Long-term US interest rates are rising even as markets price in five Federal Reserve rate cuts over the coming 12 months and oil prices fall, disconnecting long rates from those drivers. This pattern suggests long rates are being pushed up by emerging concerns about US fiscal sustainability.
  • Larry Summers and Bob Rubin Join Our CIOs to Discuss the Surprising Economic Cycle — Adopting the Simpson-Bowles fiscal consolidation when interest rates were at zero would have risked excessive disinflation, since long rates had no room to fall to provide an offsetting expansionary impulse. After the large run-up in debt and rise in real interest rates, the developing fiscal situation risks inflationary pressure, Treasury market disruption, or crowding out of private investment.
  • C’est la vie: Bond Vigilantes Are Back — France's government bond yield spread widened by 0.29 percentage points, more than Italy's 0.22 and Spain's 0.2, which the authors attribute to political uncertainty created by the calling of a snap national election. The French spread has remained elevated, while the Italian and Spanish spreads have come down.

AI Summary. The US budget deficit is the largest among OECD countries despite the US economy being in a solid cyclical position, when strong growth would typically lift tax revenues and reduce unemployment benefit spending. Slower growth and higher unemployment would worsen the US fiscal position further.

Torsten Sløk Apollo
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Database

Torsten Sløk notes that despite a “solid cyclical position,” the 2.9% primary US deficit (excluding interest payments) is the largest among advanced economies. Overall the US deficit is ~ 6% of GDP.

Does the US run the largest deficit despite strong growth?

Core argument: The US budget deficit is the largest among OECD countries, even though the US economy remains in a solid cyclical position that typically lifts tax revenues and reduces unemployment benefit outlays.

A strong economy usually means higher tax revenues for the government and lower expenditures on unemployment benefits, which in turn means better government finances. Despite the US being in a solid cyclical position, the US budget deficit is the biggest among OECD countries. If growth slows and the unemployment rate rises, the US fiscal position will deteriorate even further.

Takeaways by Macro Roundup® AI

  1. The US budget deficit is the largest among OECD countries, even though the US economy remains in a solid cyclical position that typically lifts tax revenues and reduces unemployment benefit outlays.
  2. Slower US growth combined with a rising unemployment rate would worsen the US fiscal position further.

Related Articles:

  • An Update to the Budget and Economic Outlook: 2024 to 2034 — The Congressional Budget Office projects a federal budget deficit of $1.9tn in fiscal 2024, or $2tn excluding payment-timing shifts, rising to $2.8tn by 2034. On that adjusted basis, deficits equal 7% of gross domestic product in 2024, dip to 5.5% by 2027, and reach 6.9% by 2034, versus a 3.7% average over the past 50 years.
  • When Does Federal Debt Reach Unsustainable Levels? — The authors estimate that U.S. debt held by the public cannot exceed roughly 200% of GDP even under favorable market conditions, and that under current policy the ratio reaches 175–200% within about 20 years. After that point, they argue, no tax increases or spending cuts could avert default or inflationary debt monetization.
  • From Riches to Rags: Causes of Fiscal Deterioration Since 2001 — Federal debt held by the public rose from 32% to 98% of GDP over roughly two decades, despite earlier Congressional Budget Office projections that the debt would be paid off. The authors attribute 37 percentage points to major tax cuts, 33 to discretionary spending and Medicare expansions, and 28 to recession and pandemic responses.