Edward Conard

Top Ten New York Times Bestselling Author

  • “…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 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
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “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 must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…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
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Wednesday, May 28, 2025

AI Summary. Asia's 11 largest economies have accumulated $7.5tn in US stocks and bonds, but their annual capital flows into the US fell to $68bn, equal to just 11% of their trade surpluses with the US. Their major currencies, including the yen and yuan, trade on average 57% below exchange rates adjusted for living-cost differences.

Ruth Carson, Masaki Kondo, Rebecca Choong Wilkins, and Diana Li Bloomberg
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Asia’s 11 largest economies ran a surplus of more than $900B in 2024, and hold $7.5T of dollar assets. Their net capital flows into the US fell to $68B in 2024, and there is concern that outflows could “hit like an avalanche” to avoid FX losses.

Are Asian economies recycling less of their trade surpluses into US assets?

Core argument: Asia's 11 biggest economies have bought $4.7 trillion of US equities and bonds since 1997, bringing total investments to $7.5 trillion, according to a Bloomberg analysis of US Treasury Department capital flow data.

For decades, Asia’s export powerhouses had a simple financial strategy: Sell goods to the US, then invest the proceeds in American assets. The current-account surplus of Asia’s 11 biggest economies totaled more than $900 billion last year, according to official data tallied by Bloomberg. Collectively, the 11 biggest economies have bought $4.7 trillion of US equities and bonds since 1997, taking total investments to $7.5 trillion, according to a Bloomberg analysis of capital flow data from the US Department of the Treasury. By 2024, Asia’s capital inflows into [the US] had dropped to $68 billion, making up just 11% of [its] trade surpluses with the US that had continued to expand. There are indicators suggesting that Asian currencies are severely undervalued. On average, the region’s major currencies — including the yen and yuan — are trading at 57% weaker than exchange rates that take into account differences in the costs of living, according to data compiled by Bloomberg News going back to 2007. That’s close to an all-time low of 59% set in mid-2024.

Takeaways by Macro Roundup® AI

  1. Asia's 11 biggest economies have bought $4.7 trillion of US equities and bonds since 1997, bringing total investments to $7.5 trillion, according to a Bloomberg analysis of US Treasury Department capital flow data.
  2. Asian capital inflows into the US fell to $68 billion by 2024, just 11% of the region's expanding trade surpluses with the US, while the current-account surplus of Asia's 11 biggest economies topped $900 billion last year.
  3. Asia's major currencies, including the yen and yuan, trade on average 57% weaker than exchange rates accounting for cost-of-living differences, close to an all-time low of 59% set in mid-2024, according to Bloomberg data going back to 2007.

Related Articles:

  • Taiwan’s Markets Jolted as Currency Surges Most Since 1980s — Taiwan's dollar surged as much as 5% in a day, its largest move since 1988, as traders speculated authorities might permit appreciation to help secure a trade deal with the US. Taiwan's central bank attributed the two-day appreciation partly to market chatter and urged against irresponsible speculation.
  • The Coming Asian FX ‘Avalanche’ — Investment firm Eurizon SLJ argues that Asian exporters have hoarded much of their trade surpluses in dollar deposits rather than repatriating them, creating an overhang the firm roughly estimates at $2.5tn in China plus more from Taiwan, Malaysia, and Korea, growing about $500bn a year. It predicts this raises the risk of a non-linear dollar sell-off.
  • Are Foreigners Selling US Assets? — European and Japanese investors hold roughly 30% and 20% of their fixed income in foreign debt, versus under 10% for US investors, with US bonds making up about 15% of Eurozone and Japanese portfolios. Because foreign investors are less sticky than domestic ones, turmoil in US bond markets has greater potential to unsettle them.

AI Summary. US federal interest payments were projected to rise from 18% of tax revenues to about 22% by 2034 under the Congressional Budget Office's prior baseline. The author estimates that if the yield curve stays at current levels and policy is unchanged, that ratio would exceed 25% by 2032 and approach 30% by 2035.

Chris Marsh Money Inside Out
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Interest as a share of Federal revenues will exceed its 1980’s peak shortly. If the yield curve remains at current levels rather than reverting towards the CBO benchmark, interest-to-revenues will exceed 25% by 2032 and 30% by 2035. @GeneralTheorist

How fast will interest payments consume federal tax revenues?

Core argument: Under the CBO's previous baseline yield curve assumptions, US interest payments as a share of tax revenues were projected to rise from 18% this year to about 22% by 2034.

Recent budget proposals will push the United States into entirely uncharted territory—and potentially do so much quicker than previously expected. In short, even with the yield curve assumptions implied in the CBO’s previous baseline, interest payments as a share of tax revenues were set to increase from 18% this year to about 22% by 2034. Reconciliation will lower projected tax revenues further, raising this ratio. But if the yield curve settles at current levels, then interest-to-revenues will exceed 25% already by 2032 and will be on the way to 30% by 2035 on unchanged policy. If the yield curve truly remains at current levels, interest-to-revenues will exceed one-quarter already in 2032—and, in nominal terms, will double from projected USD1.0 trillion in 2026 to exceed USD2.1 trillion already in 2034.

Takeaways by Macro Roundup® AI

  1. Under the CBO's previous baseline yield curve assumptions, US interest payments as a share of tax revenues were projected to rise from 18% this year to about 22% by 2034.
  2. If the yield curve settles at current levels, US interest-to-revenues would exceed 25% by 2032 and approach 30% by 2035 on unchanged policy.
  3. Should the yield curve remain at current levels, nominal US interest payments would double from a projected USD1.0 trillion in 2026 to more than USD2.1 trillion by 2034.

Related Articles:

  • 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.
  • Global Debt Report 2025 — About 60% of fixed-rate government debt in advanced economies maturing by 2027 — roughly $9tn — was issued before the recent interest-rate tightening, with weighted average yields below 2% versus projected 10-year rates near 3.6%, implying refinancing at nearly double the original cost. France, Spain, the UK, and the US face heightened vulnerability, with maturing debt exceeding 15% of GDP.
  • The Long-Term Budget Outlook: 2025 to 2055 — The Congressional Budget Office projects the 10-year Treasury note interest rate will average 3.8% over 2025–2055, close to its 3.7% average over the prior three decades, with the inflation-adjusted rate averaging 1.5%. It assesses that long-run rates are largely set by structural factors including demographics, saving and investment behavior, and federal debt.

AI Summary. The Congressional Budget Office projects that raising average annual productivity growth from 1.1% to 1.6% on a sustained basis would stabilize federal debt relative to GDP, but the authors find no evidence plausible policy changes could achieve that without significantly increasing the deficit. They identify seven areas—including immigration, housing, and permitting—where growth-enhancing changes could lower the debt trajectory.

Douglas Elmendorf, Glenn Hubbard and Zachary Liscow National Bureau of Economic Research
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Growth-enhancing policies in seven areas can “lower the trajectory of debt/GDP” but “almost certainly cannot” raise productivity growth from the current 1.1% to the 1.5% that would be required to stabilize the debt without tax or spending changes.

Can growth-enhancing policies alone stabilize federal debt?

Core argument: CBO projects that raising average annual productivity growth from 1.1 percent to 1.6 percent on a sustained basis would stabilize federal debt relative to GDP.

As policymakers consider ways to increase economic growth and to put federal debt on a sustainable path, policies that could contribute to both goals simultaneously might be high on the agenda. According to CBO’s projections, raising average annual productivity growth from 1.1 percent to 1.6 percent on a sustained basis would stabilize debt relative to GDP. We have found no evidence that such a large and sustained increase in productivity could be generated by plausible changes in government policy that would not themselves increase the deficit significantly. We conclude, therefore, that growth-enhancing policies almost certainly cannot stabilize federal debt on their own. However, some growth-enhancing policies can reduce the explicit tax hikes, spending cuts, or both that are needed to stabilize debt. Potential changes in seven areas—immigration, housing, the safety net, electricity transmission, R&D, taxes on business investment, and permitting - would boost economic growth, and some of those changes would do so at a low enough direct budgetary cost that they would lower the trajectory of debt relative to GDP.

Takeaways by Macro Roundup® AI

  1. CBO projects that raising average annual productivity growth from 1.1 percent to 1.6 percent on a sustained basis would stabilize federal debt relative to GDP.
  2. The authors found no evidence that such a large, sustained productivity increase could be generated by plausible policy changes that would not themselves significantly increase the deficit, and conclude that growth-enhancing policies almost certainly cannot stabilize federal debt on their own.
  3. Changes in seven areas—immigration, housing, the safety net, electricity transmission, R&D, taxes on business investment, and permitting—would boost economic growth, and some would do so at a low enough direct budgetary cost to lower the trajectory of debt relative to GDP.

Related Articles:

  • A Critical Juncture Amid Policy Shifts — US artificial-intelligence-producing sectors' value added quadrupled from $278bn to $1.13tn in constant 2017 dollars between 2010 and 2023, raising their share of GDP from 2.4% to 3.5% while manufacturing's share fell 1.5 percentage points. The authors attribute the data-processing sector's productivity gains largely to elevated physical capital investment and complementary intermediate inputs, including energy.
  • Productivity During and Since the Pandemic — Total factor productivity growth since early 2021 has run only slightly above its 2010–19 average, suggesting the 2020 productivity surge reflected cyclical dynamics layered on a continuation of the slow pre-pandemic trend. Productivity has since grown somewhat faster than the authors' analysis predicted, but remains well below the 1995–2004 pace.
  • Is The Great Stagnation Actually Just a ‘So-So’ Stagnation? — Long-running U.S. tests show population average reading scores moved from 255 to 256 out of 500 and math from 266 to 271, despite educational attainment rising more than three years. The author argues that if added schooling has not raised productivity, measured total factor productivity growth has been understated, shrinking the apparent "Great Stagnation" by about a third.

AI Summary. Recent college graduates aged 22–27 account for 12% of the 60 basis-point rise in US unemployment, more than twice their 5% share of the labor force. In computer and mathematical occupations, employment for that age group has fallen 8% since 2022 while older workers' employment grew 0.8%.

Matthew Martin Oxford Economics
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Workers 22–27 with at least a college degree contributed 7 bps, or 12%, of the 60 bp rise in the US unemployment rate since mid-2023, 2x their weight in the labor force. Math and computer jobs for this group fell 8% since 2022.

Are recent college graduates driving a disproportionate share of rising unemployment?

Core argument: Recent college graduates aged 22–27 with a bachelor's degree or higher account for 7 bps, or 12%, of the 60 bp rise in the U.S. unemployment rate since mid-2023, more than twice their 5% share of the labor force.

Recent college graduates, or those aged 22 to 27 who attained a bachelor's degree or higher, account for 7bps, or 12%, of the 60 bp rise in the national unemployment rate since mid-2023, contributing more than twice its 5% share of the total labor force. Job openings for professional and business services sharply declined since 2021 by more than 40%, which caused a marked increase in unemployment within the industry. Some of this could be related to a normalization in hiring after the post-pandemic expansion by tech companies, following the reopening of the economy, [but] computer and mathematical science occupations are disproportionately exposed to automation and displacement. A high adoption rate by information companies along with the sheer employment declines in these roles since 2022 suggested some displacement effect from AI. The largest displacement seems to be in entry-level jobs normally filled by recent graduates. While employment for those older than 27 in computer science and mathematical occupations has grown a modest 0.8% since 2022, employment for those aged 22-27, or recent graduates, has declined by 8%. This compares with a 2% rise for college graduates in all other occupations.

Takeaways by Macro Roundup® AI

  1. Recent college graduates aged 22–27 with a bachelor's degree or higher account for 7 bps, or 12%, of the 60 bp rise in the U.S. unemployment rate since mid-2023, more than twice their 5% share of the labor force.
  2. Employment in computer and mathematical science occupations for those aged 22–27 has declined 8% since 2022, while employment for those older than 27 in those occupations grew 0.8% and college graduates in all other occupations rose 2%.
  3. Job openings in professional and business services have fallen more than 40% since 2021, alongside a marked increase in unemployment within the industry, and high AI adoption by information companies suggests some displacement effect concentrated in entry-level roles.

Related Articles:

  • Something Alarming Is Happening To The Job Market — Young college graduates have almost always had a lower unemployment rate than the overall labor force over the past four decades, but that gap recently hit an all-time low. One interpretation is that firms are replacing young workers with machines, though the surge in productivity growth such a shift would imply is hard to find in the data.
  • Technological Disruption in the Labor Market — The authors measure US labor market structure since 1880 and find 1990–2017 less disruptive than any earlier period, because past changes from general-purpose technologies like steam and electricity were so profound. They identify four recent signs of accelerating change, including a 50%+ rise in science and technology employment share since 2010.
  • The Rapid Adoption of Generative AI — A nationally representative U.S. survey found 39% of people aged 18-64 used generative AI, with more than 24% of workers using it in the prior week and nearly one in nine using it every workday. The authors estimate 0.5-3.5% of U.S. work hours are currently assisted by generative AI.

AI Summary. Four of Europe's oldest industrial groups — Schneider Electric, Siemens AG, ABB and Legrand — have added a combined €151bn in market value amid soaring demand for data centres driven by the artificial intelligence boom. Data centres are their fastest-growing source of revenue, reflecting the computing power required by AI models, gaming, cloud computing and streaming.

Ian Johnston, Mercedes Ruehl and Patricia Nilsson Financial Times
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Schneider Electric is now more valuable than France’s Total, as the data center buildout drives the revenue of some of the oldest industrial groups in Europe that manufacture electric equipment.

Is the AI data centre boom lifting Europe's old industrial groups?

Core argument: Schneider Electric, Siemens AG, ABB and Legrand have added a combined €151bn in market value since the launch of ChatGPT in November 2022, with Siemens AG rising more than 60%.

Four of Europe’s oldest industrial groups have added more than €150bn to their market caps on the back of soaring demand for data centres driven by the boom in artificial intelligence. Investors have spotted the potential. Since the launch of ChatGPT in November 2022, the market valuations of Schneider Electric, Siemens AG, ABB and Legrand — four of the leading European groups in the sector — have grown a combined €151bn, rising more than 60% in the case of German-listed Siemens AG. The groups continue to provide electricity to residential buildings and industrial groups. But data centres are their fastest-growing source of revenue, driven by the volume of computing power required by AI models, as well as gaming, cloud computing and streaming.

Takeaways by Macro Roundup® AI

  1. Schneider Electric, Siemens AG, ABB and Legrand have added a combined €151bn in market value since the launch of ChatGPT in November 2022, with Siemens AG rising more than 60%.
  2. Data centres are the fastest-growing source of revenue for Schneider Electric, Siemens AG, ABB and Legrand, driven by the computing power required by AI models as well as gaming, cloud computing and streaming.
  3. Schneider Electric, Siemens AG, ABB and Legrand continue to provide electricity to residential buildings and industrial groups alongside their data centre business.

Related Articles:

  • Economic Growth Now Depends on Electricity, Not Oil — Average annual electricity load growth reached 3% and is projected to continue at that rate for five years, with utilities raising expected peak demand for 2029 by 12%, or 101 gigawatts, driven by data centers, new factories, electric vehicles, heat pumps, and hydrogen production.
  • Heliocentrism — An energy use must be electrified before green grid electricity can decarbonize it, and while US grid decarbonization continues at a steady pace, the electricity share of final US energy consumption has grown little. Transmission line growth runs well below Department of Energy targets for 2030 and 2035, and transformer delivery times have stretched from 4–6 weeks to 2–3 years.
  • Electricity 2025 — US electricity demand is projected to grow about 2% annually over 2025-2027, an upward revision from an earlier 1% forecast. A study commissioned by the US Department of Energy found data centre electricity use rose from about 60 TWh in 2014 to 176 TWh in 2023, and could reach 325-580 TWh by 2028.

AI Summary. Nippon Steel is considering granting the U.S. government a "golden share" in U.S. Steel to advance its acquisition, a special class of stock whose holder can control board composition and wield influence over major management decisions. U.S.-listed companies generally cannot issue golden shares, but Nippon Steel plans to delist U.S. Steel.

Naoki Matsuda Nikkei Asia
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In its effort to gain approval for the acquisition of US Steel, Nippon Steel is considering granting to the federal government a unique class of stock that would give it considerable control, including over the composition of the Board of Directors.

Can a "golden share" for the government clear a foreign steel acquisition?

Core argument: Nippon Steel is considering granting the U.S. government a "golden share" in U.S. Steel, a stock class whose holder gains special rights including control over the composition of the board of directors.

Nippon Steel is considering handing a "golden share" to the U.S. government as a way to proceed with its acquisition of U.S. Steel. Golden shares are a unique class of stock that grants their holder special rights, including the right to control the composition of the board of directors. If Washington ends up holding a golden share in U.S. Steel, it would wield considerable power over important management decisions for the company even after the acquisition -- something that U.S. President Donald Trump has emphasized. U.S.-listed companies generally are not allowed to issue golden shares. If the acquisition is approved, Nippon Steel plans to buy all of U.S. Steel's shares and delist the company. It appears there are no restrictions if a golden share is issued after delisting and then transferred to the U.S. government.

Takeaways by Macro Roundup® AI

  1. Nippon Steel is considering granting the U.S. government a "golden share" in U.S. Steel, a stock class whose holder gains special rights including control over the composition of the board of directors.
  2. A U.S. government golden share would give Washington considerable power over important management decisions at U.S. Steel even after the acquisition, an outcome President Donald Trump has emphasized.
  3. U.S.-listed companies generally cannot issue golden shares, but Nippon Steel plans to buy all U.S. Steel shares and delist the company, and no restrictions appear to apply if a golden share is issued after delisting and transferred to the U.S. government.

Related Articles:

  • Biden Blocks Nippon Steel’s $14.1 Billion Takeover of US Steel — The US government blocked Nippon Steel's $14.1bn takeover of US Steel, a victory for the United Steelworkers union's leadership, which opposed the deal even as some rank-and-file members backed it. The decision leaves US Steel potentially needing to restart a sale process, and it could struggle to find a buyer for the entire company.
  • “No Inventions; No Innovations,” A History of US Steel — US Steel lagged in adopting steelmaking technology, only moving into minimills through an acquisition and a new Alabama plant, with minimills now making about 25% of its domestic output. Rival minimill producer Nucor passed US Steel in output and is now the largest US steel producer.
  • Steel Productivity has Plummeted Since Trump’s 2018 Tariffs — Output per hour in the U.S. steel industry has fallen 32% since 2017, following the imposition of 25% tariffs on steel imports, while output per hour for the economy as a whole rose 15%. U.S. steel-using firms, which employ roughly 45x as many Americans as steel producers, pay about 75% more for steel than global competitors.

AI Summary. A SpaceX Starship test flight ended in a mid-flight rupture, and the reused Super Heavy booster — a step toward a rapidly reusable launch system — was also destroyed before its planned splashdown. Starship's door failed to open to release dummy satellites meant to test deployment of upgraded Starlink internet satellites.

Sana Pashankar and Eric Johnson Bloomberg
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SpaceX’s Starship failed mid-flight. SpaceX’s reusable launch system also failed. The test foiled efforts to deploy dummy satellites, a crucial test of the company’s ability to deploy upgraded satellites to expand SpaceX’s Starlink.

Does a failed test flight set back reusable rocket development?

Core argument: SpaceX's Starship ruptured mid-flight, and Elon Musk vowed to increase the pace of Starship launches after the failure.

While SpaceX had managed to refurbish and launch a previously flown Super Heavy booster — a key step to developing Musk’s dream of a rapidly reusable launch system — it, too, was destroyed before it could splash down in the Gulf of Mexico as planned. Even worse, Starship’s door failed to open and deploy the dummy satellites that were part of a crucial test of the company’s ability to deploy upgraded satellites designed to expand SpaceX’s Starlink internet unit.

Takeaways by Macro Roundup® AI

  1. SpaceX's Starship ruptured mid-flight, and Elon Musk vowed to increase the pace of Starship launches after the failure.
  2. SpaceX refurbished and launched a previously flown Super Heavy booster, a step toward Musk's goal of a rapidly reusable launch system, but the booster was destroyed before its planned splashdown in the Gulf of Mexico.
  3. Starship's door failed to open and deploy dummy satellites in a test of SpaceX's ability to deploy upgraded satellites designed to expand its Starlink internet unit.

Related Articles:

  • It’s Not a Space Race, It’s the Space Olympics — The US operates 81% of commercial satellites in orbit and 86% of global effective launch capacity, with NATO allies second in satellites at 11% and China second in launch capacity at 9%. China is pursuing mega satellite constellations and reusable rockets, in many cases copying approaches already proven by US companies.
  • Building an Enduring Advantage in the Third Space Age — The United States and China each logged their highest-ever annual launch rates, at 103 and 66 launches, while Russia fell to 19 and Europe recorded three. The US accounted for roughly half of global launches but 81% of effective launch capacity, since Falcon 9 and Falcon Heavy comprised 93% of US launches.
  • Has Starlink Already Won the New Space Race? — Starlink has launched more than 8,417 satellites, 39% of all satellites launched since the first artificial satellite reached orbit, and its roughly 7,300 operational satellites make up almost two-thirds of all operational spacecraft. It delivers low-latency broadband to over 5mn customers in 125 countries and is projected to generate $12bn in revenue and $2bn in free cash flow this year.

Thursday, May 29, 2025

AI Summary. U.S. survey data show the top 1% held 35% of total wealth, down from a peak of 39% in 2016, a decline the authors attribute to strong housing price appreciation that disproportionately benefited middle-class households. Including the 400 wealthiest Americans, the top 1% share fell from 40.2% in 2016 to 36.9%.

Moritz Kuhn and José-Víctor Ríos-Rull National Bureau of Economic Research
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In the SCF, the wealth share of the top 0.1% of the wealth distribution rose from 10.6% in 1989 to 14.7% in 2022. Adding the Forbes 400 to the sample yields an increase from 12.2% to 17.1%. The Forbes 400 share rose from 1.8% to 2.8%.

Has rising housing wealth reduced the top 1%'s share of wealth?

Core argument: The 2022 Survey of Consumer Finances shows the top 1% holding 35% of total U.S. wealth, down from a 39% peak in 2016, a decline attributed to housing price appreciation that disproportionately benefited middle-class households.

The 2022 [Survey of Consumer Finances] data reveal that wealth remains highly concentrated, with the top 1% holding 35% of total wealth, down from a peak of 39% in 2016. This recent decline in wealth concentration—occurring despite rising income inequality— reflects strong housing price appreciation that disproportionately benefited middle-class households. While the SCF excludes the Forbes 400 (the wealthiest 400 Americans), incorporating their wealth from Forbes Magazine estimates reveals interesting patterns. Their share of total household wealth increased from 1.8% in 1989 to a peak of 3.0% in 2019 before slightly declining to 2.8% in 2022. The top 1% wealth share (including the Forbes 400) followed a similar pattern, rising from 31.2% in 1989 to 40.2% in 2016, before falling to 36.9% in 2022. This recent decline represents a potential inflection point in the long-term trend of rising wealth concentration.

Takeaways by Macro Roundup® AI

  1. The 2022 Survey of Consumer Finances shows the top 1% holding 35% of total U.S. wealth, down from a 39% peak in 2016, a decline attributed to housing price appreciation that disproportionately benefited middle-class households.
  2. Including the Forbes 400, whom the Survey of Consumer Finances excludes, the top 1% wealth share rose from 31.2% in 1989 to 40.2% in 2016 before falling to 36.9% in 2022.
  3. The Forbes 400's share of total U.S. household wealth increased from 1.8% in 1989 to a peak of 3.0% in 2019, then edged down to 2.8% in 2022.

Related Articles:

  • The Gilded Age and Beyond: The Persistence of Elite Wealth in American History — The authors find that most extremely wealthy Americans fall out of the top tail within their lifetimes, and that grandparental wealth is associated with reaching the top 1% in a non-linear way. Still, over 90% of grandchildren of top 1% grandfathers did not reach that level.
  • Inequality Hasn’t Risen. Here’s Why It Feels Like It Has — In both the US and UK, the lowest earners have seen the fastest wage growth and aggregate inequality has not increased, as low-skilled workers gained and middle-skilled workers lost from the hollowing out of the middle of the jobs distribution. The author argues middle earners face both resentment and precarity.
  • The Economics of Inequality in High-Wage Economies — Information technology created investment opportunities exceeding the supply of properly trained talent, while trade with low-wage economies, low-skilled immigration, trade deficits, and aging demographics eased constraints on low-skilled labor and risk-averse savings. The author argues this framework, rather than rising cronyism, explains high returns to success, slowing productivity growth, and low interest rates.

AI Summary. Inflation-adjusted US house prices are 1.0% below their 2022 peak. An affordability index built from median income, a 15% down payment, and 30-year fixed mortgage rates shows the monthly payment on the same house up 102% over four years, with prices up 34% and mortgage rates at 6.65%.

Bill McBride Calculated Risk
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Real house prices are now 1% below the 2022 peak and 12% above the 2006 peak. With house prices up 34% over four years, affordability remains at levels last seen in the early 1980s when 30-year mortgage rates were over 14%. @calculatedrisk

How much have monthly house payments risen over four years?

Core argument: Inflation-adjusted U.S. house prices stand 1.0% below their 2022 peak, based on the Case-Shiller National Index, seasonally adjusted.

I’ve put together my own affordability index [using] median income from the Census Bureau (estimated 2024 and 2025), assumed a 15% down payment, and used a 2% estimate for property taxes, insurance and maintenance. This is probably low for high property tax states like New Jersey and Texas, and too high for lower property tax states. For house prices, I used the Case-Shiller National Index, Seasonally Adjusted (SA). Also, for the down payment - there wasn’t a significant difference between 15% and 20%. For mortgage rates, I used the Freddie Mac PMMS (30-year fixed rates). So here is what the index looks like (lower is more affordable). The monthly payment for the same house, with house prices up 34% over four years and mortgage rates at 6.65% in March 2025, would be $3,444 - an increase of 102%! More than double for the same house.

Takeaways by Macro Roundup® AI

  1. Inflation-adjusted U.S. house prices stand 1.0% below their 2022 peak, based on the Case-Shiller National Index, seasonally adjusted.
  2. The monthly payment for the same house would rise 102% to $3,444, with house prices up 34% over four years and 30-year fixed mortgage rates at 6.65% in March 2025.
  3. The affordability index uses Census Bureau median income (2024 and 2025 estimated), a 15% down payment, a 2% estimate for property taxes, insurance and maintenance, and Freddie Mac PMMS mortgage rates, with little difference between 15% and 20% down.

Related Articles:

  • The Price of Housing in the United States — Real housing price appreciation in the United States has varied widely across regions, with West Coast cities rising earlier while prices in other regions remained comparable in real terms to decades earlier. The authors find essentially no relationship between real price growth and zoning restrictiveness in the earliest period studied, and progressively steeper gradients in later periods.
  • 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%.
  • Fannie and Freddie May Foment Another Crisis — Fannie Mae and Freddie Mac back more than 60% of new mortgages, up from roughly 45% before the 2008 financial crisis, and hold a $7.5tn loan portfolio; including Federal Housing Administration and Veterans Affairs loans, the government backs nearly 85% of the mortgage market. The Federal Reserve owns $2.2tn in mortgage-backed securities.

AI Summary. The US Court of International Trade ruled that the administration wrongly invoked a 1977 law to impose sweeping tariffs on dozens of countries, along with earlier levies on Canada, Mexico and China tied to border security and fentanyl, making them illegal. The administration said it would appeal.

Shawn Donnan, Erik Larson, and Laura Curtis Bloomberg
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The Court of International Trade blocked tariffs imposed on “Liberation Day” under IEEPA authority. Tariffs imposed under other authority, such as Section 301 tariffs on China, remain in place along with levies on auto parts, aluminum, and steel.

Does a court ruling invalidate emergency-law tariffs on dozens of countries?

Core argument: A three-judge panel of the US Court of International Trade ruled that the Trump administration wrongly invoked a 1977 law in imposing its "Liberation Day" tariffs on dozens of countries, declaring them illegal.

In a ruling issued late Wednesday, a three-judge panel for the US Court of International Trade declared that the Trump administration had wrongly invoked a 1977 law in imposing his “Liberation Day” tariffs on dozens of countries and they were therefore illegal. It also extended that ruling to previous tariffs levied on Canada, Mexico and China over the security of the US border and trafficking in fentanyl. The Trump administration immediately said it would appeal, putting the fate of the tariffs in the hands of an appellate court and potentially the Supreme Court. The ruling doesn’t affect Trump’s first-term levies on many imports from China or sectoral duties planned or already imposed on goods including steel, which are based on a different legal foundation that the Trump administration may now be forced to make more use of to pursue its tariff campaign.

Takeaways by Macro Roundup® AI

  1. A three-judge panel of the US Court of International Trade ruled that the Trump administration wrongly invoked a 1977 law in imposing its "Liberation Day" tariffs on dozens of countries, declaring them illegal.
  2. The court extended its ruling to earlier tariffs on Canada, Mexico and China tied to US border security and fentanyl trafficking, while leaving intact first-term levies on many Chinese imports and sectoral duties such as steel that rest on a different legal foundation.
  3. The Trump administration said it would appeal, placing the tariffs' fate with an appellate court and potentially the Supreme Court, and may be forced to make greater use of the separate legal authority behind its sectoral duties.

Related Articles:

  • State of U.S. Tariffs: May 29, 2025 — The authors estimate that if tariffs issued under emergency economic powers are invalidated, leaving only steel, aluminum, auto, and auto parts tariffs, consumers would face an average effective tariff rate of 6.9%, the highest since 1969. They project a 0.6% short-run price increase, equal to an average household loss of $950, and US real GDP growth 0.2pp lower.
  • Help for the Heartland? The Employment and Electoral Effects of the Trump Tariffs in the United States — The authors find that the combined effect of U.S.-China trade war import tariffs, retaliatory tariffs, and farm subsidies on employment in exposed U.S. locations was at best a wash and possibly mildly negative, while residents of tariff-protected areas became less likely to identify as Democrats and more likely to vote Republican.
  • Why Didn’t Tariffs Push up the U.S. Dollar? — The US dollar was exceptionally strong at a level implying an ever-shrinking export base and an ever-growing trade deficit, requiring continually larger foreign inflows at ever more inflated dollar and US equity valuations to sustain. Even after its recent slide, the dollar remains strong by almost all measures.

AI Summary. The authors estimate that if tariffs issued under emergency economic powers are invalidated, leaving only steel, aluminum, auto, and auto parts tariffs, consumers would face an average effective tariff rate of 6.9%, the highest since 1969. They project a 0.6% short-run price increase, equal to an average household loss of $950, and US real GDP growth 0.2pp lower.

Ernie Tedeschi Yale University
Date Posted:

The May 28 Court Ruling disallowing the tariffs imposed under IEEPA leaves only the Section 232 tariffs on steel, aluminum, autos and auto parts in place. The latter sees a 5% long-run price rise, ~ an extra $2,400 on the cost of an average 2024 new car.

How costly are tariffs if emergency-power tariffs are struck down?

Core argument: Assuming the May 28 U.S. Court of International Trade ruling invalidates all IEEPA tariffs and leaves only Section 232 tariffs on steel, aluminum, autos, and auto parts, consumers face an average effective tariff rate of 6.9%, the highest since 1969.

[We] estimated the effects of all remaining US tariffs and foreign retaliation implemented in 2025 through May 28, assuming all tariffs previously introduced under IEEPA authority are invalidated per the May 28 U.S. Court of International Trade Ruling, which leaves only tariffs introduced under Section 232 authority in place: tariffs on steel and aluminum as well as autos and auto parts. Consumers face an overall average effective tariff rate of 6.9%, the highest since 1969. The price level from all 2025 tariffs rises by 0.6% in the short-run, the equivalent of an average per household consumer loss of $950 in 2024$. Annual pre-substitution losses for households at the bottom of the income distribution are $800. The post-substitution price increase settles at the same 0.6%. The 2025 tariffs affect metals inputs and automobile prices primarily. The latter sees a 5% long-run price increase, the equivalent of an extra $2,400 on the cost of an average 2024 new car. US real GDP growth is -0.2pp lower from all 2025 tariffs. All tariffs to date in 2025 raise $686 billion over 2026-35, with $101 billion in negative dynamic revenue effects.

Takeaways by Macro Roundup® AI

  1. Assuming the May 28 U.S. Court of International Trade ruling invalidates all IEEPA tariffs and leaves only Section 232 tariffs on steel, aluminum, autos, and auto parts, consumers face an average effective tariff rate of 6.9%, the highest since 1969.
  2. The 2025 tariffs are estimated to raise the short-run price level by 0.6%, equivalent to an average household consumer loss of $950 in 2024 dollars, with annual pre-substitution losses of $800 for households at the bottom of the income distribution.
  3. Automobile prices are projected to rise 5% in the long run, an extra $2,400 on an average 2024 new car, while US real GDP growth is 0.2pp lower and 2025 tariffs raise $686 billion over 2026–35, including $101 billion in negative dynamic revenue effects.

Related Articles:

  • Trump Trade Strategy Roiled by Court Blocking Global Tariffs — The US Court of International Trade ruled that the administration wrongly invoked a 1977 law to impose sweeping tariffs on dozens of countries, along with earlier levies on Canada, Mexico and China tied to border security and fentanyl, making them illegal. The administration said it would appeal.
  • State of U.S. Tariffs: May 12, 2025 — The authors estimate that all 2025 US tariffs raise the short-run price level by 1.7%, equal to an average consumer loss of $2,800 per household, cut real GDP growth by 0.7 percentage points, and leave the economy persistently 0.4% smaller, or $110bn annually. They project the tariffs raise $2.7tn over 2026-35, $300bn more than under a 145% China rate.
  • This is What Normalization Looks Like (Mostly) — Estimates of the legislation's cost rest on a baseline assuming individual and business taxes would have been allowed to rise sharply as prior tax cuts expired. The Committee for a Responsible Federal Budget estimates the bill adds $3.1tn in incremental debt over 2026-2035, below its pre-election projections of $4tn and $7.8tn for the competing campaign agendas.

AI Summary. An auction of about $3.5bn of 40-year Japanese government bonds drew a bid-to-cover ratio of 2.2, the weakest demand in 10 months, amid what some traders describe as a "buyers' strike" among Japanese life insurers and other domestic investors.

Leo Lewis Financial Times
Date Posted:

A “closely watched” auction of 40-year Japanese government debt drew weak demand, with a bid-to-cover ratio of only 2.2, amid what some traders are calling a “buyers’ strike,” though yields fell to a three-week low of 3.29%.

Is demand for long-dated Japanese government bonds weakening?

Core argument: Japan's auction of roughly $3.5bn of 40-year government bonds drew a bid-to-cover ratio of 2.2, the lowest since July 2024, amid mounting concerns over the world's third-biggest bond market.

A closely watched auction of 40-year Japanese government debt has drawn the lowest demand in 10 months as concerns mount over the world’s third-biggest bond market. Demand for the government’s offer on Wednesday of about $3.5bn of 40-year notes attracted a bid-to-cover ratio — the number of bids received against securities offered — of 2.2, the lowest level since July 2024 and a reflection of what some traders have called a “buyers’ strike” among Japanese life insurers and other domestic participants. Longer-dated bonds had rallied on Tuesday after reports of the finance ministry surveying prime brokers and investors sparked speculation that the government might reduce its issuance of super-long debt as a measure to calm the market. Yields on the 40-year JGB, which move inversely to prices, fell to a three-week low of 3.29%.

Takeaways by Macro Roundup® AI

  1. Japan's auction of roughly $3.5bn of 40-year government bonds drew a bid-to-cover ratio of 2.2, the lowest since July 2024, amid mounting concerns over the world's third-biggest bond market.
  2. Some traders describe a "buyers' strike" among Japanese life insurers and other domestic participants in super-long government debt.
  3. Yields on the 40-year Japanese government bond fell to a three-week low of 3.29% after reports that the finance ministry surveyed prime brokers and investors sparked speculation it might cut super-long issuance.

Related Articles:

  • Fiscal Space and Rising Yields — The Bank of Japan purchased all of Japan's net new government debt issuance, and more, for over a decade under its bond-buying and yield curve control programs, meaning Japanese yields were set by the central bank rather than by markets. With the central bank no longer absorbing all new issuance, yields may need to rise further to attract private buyers.
  • The Japanese Government Bond Market is in Trouble — Yields on 40-year Japanese government bonds have risen by a full percentage point to nearly 3.7%, which the author attributes to inflation, long-term fiscal concerns, Japanese insurers largely halting purchases of very long-term bonds under new solvency rules, and the Bank of Japan shifting from buyer to net seller while still holding over 50% of the market.
  • The Global Rise in Long-Term Yields — Long-term government bond yields have risen globally, with 30-year yields in the UK and Japan at their highest levels since 2000 and the US increase modest by comparison. Rising Japanese yields reduce the incentive for Japanese households to buy foreign bonds such as US Treasuries, adding upward pressure on US long-term rates.

AI Summary. Denmark's parliament adopted a law raising the retirement age to 70 by 2040, which would be the highest in Europe, applying to everyone born after 1970. Denmark ties its official retirement age to life expectancy and revises it every five years, with increases to 68 and 69 scheduled before 2040.

Laura Gozzi BBC
Date Posted:
Is Database:
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Denmark is raising its retirement age to 70, the highest in Europe. The change will impact all persons born after 1970.

Will Denmark raise its retirement age to Europe's highest?

Core argument: Denmark's parliament passed a law raising the retirement age to 70 by 2040, which will give Denmark the highest retirement age in Europe, applying to everyone born after 31 December 1970.

Denmark is set to have the highest retirement age in Europe after its parliament adopted a law raising it to 70 by 2040. Since 2006, Denmark has tied the official retirement age to life expectancy and has revised it every five years. It is currently 67 but will rise to 68 in 2030 and to 69 in 2035. The retirement age at 70 will apply to all people born after 31 December 1970. The new law passed on Thursday with 81 votes for and 21 votes against.

Takeaways by Macro Roundup® AI

  1. Denmark's parliament passed a law raising the retirement age to 70 by 2040, which will give Denmark the highest retirement age in Europe, applying to everyone born after 31 December 1970.
  2. Denmark's retirement age, currently 67, will rise to 68 in 2030 and 69 in 2035 before reaching 70 in 2040.
  3. Denmark has tied its official retirement age to life expectancy since 2006 and revised it every five years, with the latest law passing by 81 votes to 21.

Related Articles:

  • Analysis of the 2024 Social Security Trustees’ Report — The Social Security Trustees project the retirement trust fund will deplete its reserves by 2033, triggering a 21% across-the-board benefit cut, with the combined retirement and disability funds insolvent by 2035 and a 17% cut. Restoring 75-year solvency would require the equivalent of a 27% payroll tax increase or a 21% benefit reduction.
  • China’s First Retirement Age Hike Since 1978 Triggers Discontent — China will raise its retirement age for the first time since 1978, phasing in over 15 years a shift for men from 60 to 63 and for women from 50 to 55 for ordinary workers and 55 to 58 for managers. People 65 and older are projected to reach 30% of the population by around 2035, from 14.2%.
  • Macron’s Pensions Law Clears Constitutional Hurdle After Protests — France's constitutional council validated most of a law raising the minimum retirement age from 62 to 64, ruling it valid under the constitution and legally enacted. Turnout for labour-led marches and strikes against the reform has shrunk.

AI Summary. Of 35m borrowers with federally managed student loans who were not in school, only 12m (35%) were in repayment, while 7.4m were delinquent and another 10m were in forbearance. Because default follows 270 days of nonpayment, the author warns that as many as 12m borrowers—one-third of those not in school—could end up in default.

Preston Cooper American Enterprise Institute
Date Posted:
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Database

Only 34% of the 35mm US borrowers with federally managed student loans, and not enrolled in school, were making repayments as of March. “If delinquent borrowers do not start making payments, there could be 12 million borrowers in default by year’s end.”

How many student loan borrowers are heading toward default?

Core argument: Just 12 million of the 35 million borrowers with federally managed loans who were not enrolled in school — 35% — were in repayment as of March 2025, while 7.4 million were delinquent, most at least three months behind.

Though payments “resumed” in October 2023, the lack of consequences for nonpayment may have misled borrowers into thinking the pause had been extended again. Out of 35 million borrowers with federally managed loans who were not enrolled in school, just 12 million (35%) were in repayment as of March 2025. Over one-fifth (7.4 million) were delinquent on their debts, the majority of those being at least three months behind. Another 10 million borrowers are in forbearance. These are largely people who enrolled in the SAVE plan and now await the legal battle’s outcome. While those borrowers are safe from consequences for the time being, eventually the forbearance will end. That brings the danger of a new wave of delinquencies. While millions of borrowers are delinquent today, more serious consequences await. Borrowers enter default after not making a payment for 270 days; since payments effectively resumed in October 2024, today’s delinquent borrowers will enter default sometime over the summer. If delinquent borrowers do not start making payments, there could be 12 million borrowers in default by year’s end—one‑third of all those not currently enrolled in school.

Takeaways by Macro Roundup® AI

  1. Just 12 million of the 35 million borrowers with federally managed loans who were not enrolled in school — 35% — were in repayment as of March 2025, while 7.4 million were delinquent, most at least three months behind.
  2. Another 10 million borrowers are in forbearance, largely those who enrolled in the SAVE plan and await the outcome of the legal battle, raising the danger of a new wave of delinquencies once that forbearance ends.
  3. Borrowers enter default after 270 days of nonpayment, and with payments effectively resumed in October 2024, delinquent borrowers would enter default over the summer, potentially reaching 12 million in default by year's end — one-third of those not enrolled in school.

Related Articles:

  • Significant Headwinds to Consumer Spending — With the pause on reporting delinquent federal student loans ended, up to 10% of US households may face a steep drop in their credit scores, leaving them unable to borrow for cars, homes, or furniture. Together with tariffs and high uncertainty, this is a significant headwind to consumer spending.
  • Debt Moratoria: Evidence from Student Loan Forbearance — The authors estimate that borrowers whose student loan payments were frozen ended with about $1,500 more in student loan balances and $1,200 (3%) more in other household debt, including mortgage, auto, and credit card borrowing, than borrowers without a payment stoppage. The findings suggest the pause raised short-term consumption and overall leverage, with effects concentrated among borrowers never previously delinquent.
  • What Went Wrong with Federal Student Loans? — Weakened regulations on institutions enrolling aid-dependent students led to rising enrollment of disadvantaged students, but primarily at low-value institutions where loan performance deteriorated. Institutions in the lowest loan-repayment quintile had a 23% completion rate, $27,760 average post-enrollment earnings, and 20% default rates, versus 73%, $48,375, and 3% at the highest.