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
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…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
  • “…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 fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Thursday, June 12, 2025

AI Summary. The authors estimate that geographic exposure to prescription-opioid marketing raised drug-related mortality and reliance on public transfer programs, and continuously increased the Republican vote share in House, presidential, and gubernatorial elections. They estimate a one-standard-deviation increase in exposure raised the Republican House vote share by 4.5 percentage points.

Carolina Arteaga and Victoria Barone National Bureau of Economic Research
Date Posted:
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Regions with high cancer mortality in 1996 saw increased drug-related mortality in non-cancer patients and reliance on public transfers, and a rise in the GOP vote share in elections for the House, president, and governor from the mid-2000s to 2022.

Does exposure to opioid marketing raise Republican vote share?

Core argument: The authors estimate that by the 2022 House elections, a 1 standard deviation increase in exposure to the opioid epidemic raised the Republican vote share by 4.5 percentage points, with continuous increases from the mid-2000s to 2022.

We establish a causal connection between the opioid epidemic and the political realignment between the Republican and Democratic parties. At the dawn of the opioid epidemic in 1996, marketing [to] the cancer pain market expanded within the same geographic areas to the much larger non-cancer pain market. We exploit the [resultant] geographic variation in cancer mortality as a proxy for the cancer pain market served by pharma companies and use it as a quasi-exogenous measure of exposure to the crisis. Geographic variation in the marketing of prescription opioids serves as a quasi-exogenous source of exposure to the epidemic. We use this variation to document significant increases in drug-related mortality and greater reliance on public transfer programs. This induced economic hardship led to substantial changes in the political landscape of the communities most affected by the opioid epidemic. We estimate that from the mid-2000s to 2022, exposure to the opioid epidemic continuously increased the Republican vote share in House, presidential, and gubernatorial elections. By the 2022 House elections, a 1SD increase in our measure of exposure led to a 4.5 percentage point increase in the Republican vote share.

Takeaways by Macro Roundup® AI

  1. The authors estimate that by the 2022 House elections, a 1 standard deviation increase in exposure to the opioid epidemic raised the Republican vote share by 4.5 percentage points, with continuous increases from the mid-2000s to 2022.
  2. The authors use geographic variation in cancer mortality as a proxy for the cancer pain market that pharmaceutical companies served in 1996 before expanding opioid marketing in the same areas to the much larger non-cancer pain market, treating it as quasi-exogenous exposure.
  3. Areas more exposed to prescription opioid marketing show increases in drug-related mortality and greater reliance on public transfer programs, economic hardship the authors link to shifts in the political landscape across House, presidential, and gubernatorial elections.

Related Articles:

  • Democracy and the Opioid Epidemic — Using US commuting zone data and the concentration of early prescription opioid marketing in cancer pain markets, the authors estimate that exposure to the opioid epidemic substantially increased the Republican vote share in congressional and presidential elections, with a one standard deviation rise in initial cancer mortality corresponding to 13.8 percentage points.
  • Thick Market Externalities and the Persistence of the Opioid Epidemic — Using county-level data on opioid deaths, shipments, friendship links and distance, the authors estimate large spillovers in opioid use and deaths across areas, with a shock raising deaths by 1 in one county causing 0.38 to 0.76 additional deaths elsewhere. They estimate such spillovers account for 84–92% of opioid deaths and are the main reason the epidemic has persisted.
  • Importing the Opioid Crisis? International Trade and Fentanyl Overdoses — A study using U.S. mortality and import data finds a positive state-level association between imports per resident and drug overdose death rates, driven by fentanyl and accounting for an estimated 15,000–20,000 deaths per year. The authors estimate that 10% higher imports per resident is associated with an 8.1% higher fentanyl death rate.

AI Summary. The extra compensation investors demand to hold 10-year Treasury notes rather than continually rolling over short-term bills has risen 0.9 percentage point over the past year to its highest level since 2014, evidence that US government borrowing costs have increased because of heavy federal spending. Without a buyers' strike in Treasuries, lawmakers have little incentive to curb deficits.

Robert Burgess Bloomberg
Date Posted:

In spite of a bill that the CBO forecasts will add $2.4T to US budget deficits over the next 10 years and a Moody’s downgrade, investors bid 2.52x the offer in yesterday’s Treasury auction, ”a worrying sign for fiscal conservatives,” Burgess writes.

Are federal borrowing costs rising because of heavy government spending?

Core argument: The term premium on the 10-year Treasury note has risen 0.9 percentage point over the past year to its highest level since 2014, which the author cites as evidence that US borrowing costs have climbed because of profligate government spending.

It’s no wonder that lawmakers have little incentive to get the government’s fiscal house in order, which could just exacerbate the economic and financial damage if a buyer’s strike [for Treasuries] does emerge. Perhaps Washington would think differently about debt and deficits if the so-called bond vigilantes sent a shot across its bow, like they did in the UK a few years ago when they balked at financing then Prime Minister Liz Truss’s foolhardy fiscal spending package. Nevertheless, there’s ample evidence that the US government’s borrowing costs, and by extension those of businesses and households, have risen because of its profligate spending ways. One such measure is the term premium on the 10-year Treasury note, which is essentially the extra compensation investors demand to own long-term bonds rather than holding and continually rolling over short-maturity securities such as Treasury bills. It has jumped 0.9 percentage point over the past year to the highest since 2014.

Takeaways by Macro Roundup® AI

  1. The term premium on the 10-year Treasury note has risen 0.9 percentage point over the past year to its highest level since 2014, which the author cites as evidence that US borrowing costs have climbed because of profligate government spending.
  2. The author argues that higher federal borrowing costs extend to businesses and households, and describes the term premium as the extra compensation investors demand to hold long-term bonds rather than continually rolling over short-maturity securities such as Treasury bills.
  3. The author contends that absent a warning shot from bond vigilantes, like the one that met Liz Truss's UK fiscal spending package, lawmakers have little incentive to repair public finances, which could worsen the damage if a Treasury buyer's strike emerges.

Related Articles:

  • Bond Vigilantes Snooze As Treasury Market Shrugs Off Vast US Borrowing — The 10-year US Treasury yield has fallen from a peak of 5% to 4.3% as inflows into US bond funds reached their highest level since 2021, despite heavy government borrowing. Goldman Sachs projects the stock of outstanding Treasuries will rise by $1.7tn this year, weighted more toward longer-dated bonds that are riskier for investors.
  • 10 Facts About the US Treasury Market: Monitoring Demand For US Government Debt — US government debt is projected to rise from 100% to 200% of GDP, with deficits above $1tn annually over the next decade and $9tn of debt maturing within 12 months. Debt servicing costs equal 12% of total government outlays, and interest payments have doubled from about $1bn per day before the pandemic to nearly $2bn per day.

AI Summary. China's export permitting system for rare earths and other critical minerals is detailed enough that Beijing is developing a granular understanding of where every kilogram it produces ends up and why. Bottlenecks emerged as China slowed approvals for magnets containing even minuscule amounts of seven rare earths, alongside limits on sales of the raw elements.

Martin Ritchie, Alberto Nardelli, and Laura Curtis Bloomberg
Date Posted:

China has weaponized its dominance in rare earths trade to shift the trade negotiation balance, demonstrating its ability to secure concessions from countries by curtailing supply.

How does China's rare earth export permitting give it leverage?

Core argument: JL Mag Rare-Earth Co., a major Chinese producer of rare-earth magnets, said it received export permits for countries including the US, and its Hong Kong-listed shares rose as much as 12%.

[Following US-Chinese negotiations], a major Chinese manufacturer of rare-earth magnets, JL Mag Rare-Earth Co., said it received export permits to countries including the US. Its Hong Kong-listed shares surged as much as 12%. But confusion remained about a backlog of requests, with the Wall Street Journal reporting that Beijing is putting a six-month limit on licenses for rare earth exports. And China is unlikely to allow companies to build up inventories, especially in the defense industry. New permitting China established around exporting rare earths and other critical minerals is so detailed that Beijing is building up a sophisticated understanding of where every kilogram that it produces is ending up and why, according to [anonymous sources] citing the sensitivity of the issue. In the latest flare-up, bottlenecks emerged when China slowed approvals for products — mainly magnets — containing even miniscule amounts of seven rare earths, in addition to limiting sales of the raw elements.

Takeaways by Macro Roundup® AI

  1. JL Mag Rare-Earth Co., a major Chinese producer of rare-earth magnets, said it received export permits for countries including the US, and its Hong Kong-listed shares rose as much as 12%.
  2. Beijing is putting a six-month limit on rare earth export licenses, the Wall Street Journal reported, while confusion persists over a backlog of requests and China is unlikely to let companies build up inventories, especially in defense.
  3. China's new permitting rules for rare earths and other critical minerals are so detailed that Beijing is building a sophisticated understanding of where every kilogram it produces ends up and why, according to people citing the issue's sensitivity.

Related Articles:

  • China’s Curb On Metal Exports Reverberates Across Chip Sector — China announced export curbs on gallium and germanium, metals used in chipmaking that the US government classifies among dozens of minerals critical to economic and national security.
  • China Weighs Export Ban For Rare-Earth Magnet Tech — China is weighing rules that would ban or restrict exports of technology used to process and refine rare-earth elements and to make high-performance rare-earth magnet alloys. China accounts for roughly 70% of global rare-earth production, down from about 90% a decade earlier, and retains a tight hold on refining.

AI Summary. Gold has overtaken the euro as a global reserve asset, with central bank gold holdings reaching 36,000 tons, near the mid-1960s peak of 38,000 tons, helped by a 30% rise in the gold price. The European Central Bank finds countries geopolitically close to China and Russia accumulated gold more than others.

Olaf Storbeck and Leslie Hook Financial Times
Date Posted:

Gold accounted for 20% of global official reserves in 2024, outstripping the euro’s 16%, and second only to the US dollar at 46%. The price has risen 27% this year to an historic nominal high of $3,500/troy ounce.

Has gold surpassed the euro as a global reserve asset?

Core argument: Central bank gold reserves rose to 36,000 tons in 2024, approaching the mid-1960s peak of 38,000 tons, with gold overtaking the euro as a global reserve asset, according to ECB figures.

Central bank gold reserves, which peaked at 38,000 tons in the mid-1960s, rose again to reach 36,000 tons in 2024, according to the latest ECB numbers. A 30% rise in the gold price last year was one factor behind the surge in gold’s share of global foreign reserves. Large buyers last year included India, China, Turkey and Poland, according to the World Gold Council. The central bank’s analysis showed that “countries that are geopolitically close to China and Russia” bulked up on gold more than others over the past three years. In recent years, central banks have also been trying to diversify away from the US dollar amid concerns about geopolitical instability and US debt levels. The de-dollarization trend accelerated, particularly among developing countries, after the Russian invasion of Ukraine, when the US targeted Russia’s access to financial markets. The ECB noted: “If history is any guide, further increases in the official demand for gold reserves may also support further growth in global gold supply.”

Takeaways by Macro Roundup® AI

  1. Central bank gold reserves rose to 36,000 tons in 2024, approaching the mid-1960s peak of 38,000 tons, with gold overtaking the euro as a global reserve asset, according to ECB figures.
  2. A 30% rise in the gold price last year was one factor behind the increase in gold's share of global foreign reserves, with India, China, Turkey and Poland among the large buyers, according to the World Gold Council.
  3. The ECB's analysis showed countries geopolitically close to China and Russia bulked up on gold more than others over the past three years, with de-dollarization accelerating among developing countries after Russia's invasion of Ukraine and US moves against Russia's financial market access.

Related Articles:

  • Gold Rising — China appears to be shifting its reserve diversification toward gold, but its gold allocation remains well below that of other countries at odds with the United States, such as Russia and Turkey, which raised their gold holdings substantially. Gold held in domestic custody sits outside U.S. influence.
  • Rich Countries Plan to Buy More Gold Despite Record Price — A World Gold Council survey finds almost 60% of advanced-economy central banks expect gold's share of global reserves to rise over the next five years at the expense of the US dollar, up from 38% a year earlier. About 13% plan to increase their own gold holdings within a year, the highest share recorded in the survey.
  • Asia’s $7.5 Trillion Bet on US Assets Is Suddenly Unravelling — 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.

AI Summary. IBM has laid out a roadmap for building a fault-tolerant quantum computer by 2029, citing advances in reducing errors in quantum bits and a technique for identifying and correcting errors in real time using conventional computing. Amazon and Google are also pursuing quantum error correction with dedicated chips.

Belle Lin and Isabelle Bousquette Wall Street Journal
Date Posted:

IBM Quantum Starling aims to achieve 20,000x the compute of current quantum computers by 2029, leveraging advanced error-correction techniques to ensure fault tolerance.

Is error correction bringing fault-tolerant quantum computing within reach?

Core argument: IBM's VP of Quantum, Gambetta, attributes the company's confidence in delivering a fault-tolerant quantum computer by 2029 to advances in a new error-reduction approach plus a technique for identifying and correcting errors in real time using conventional computing.

Quantum computers store information as quantum bits and are much richer objects than the binary digits that ordinary computers use. But one of quantum computing’s major problems is that qubits generate errors as they tackle problems. Gambetta, IBM’s VP of Quantum, said IBM’s confidence in its 2029 timeline stems from two recent developments: further advances in a new approach to reducing errors plus a technique for identifying and correcting errors in real-time using conventional computing. IBM isn’t the only one that has promised a fault-tolerant computer by 2029. Others have recently made progress in the area of error correction, including Amazon, with its Ocelot quantum computing chip, which it said can reduce quantum errors by up to 90%. Google is also focused on error correction with its Willow chip. IBM is releasing more detailed plans for its large-scale quantum computer at this point because it hopes to spur developers’ interest in creating quantum algorithms—a key part of the software that will run on quantum computers. That’s critical to achieving a return on investment for quantum computers.

Takeaways by Macro Roundup® AI

  1. IBM's VP of Quantum, Gambetta, attributes the company's confidence in delivering a fault-tolerant quantum computer by 2029 to advances in a new error-reduction approach plus a technique for identifying and correcting errors in real time using conventional computing.
  2. Amazon says its Ocelot quantum computing chip can reduce quantum errors by up to 90%, while Google is pursuing error correction with its Willow chip, and IBM is not alone in promising a fault-tolerant machine by 2029.
  3. IBM is releasing more detailed plans for its large-scale quantum computer to spur developers' interest in creating quantum algorithms, which it considers critical to achieving a return on investment for quantum computers.

Related Articles:

  • Physicists Question Microsoft’s Quantum Claim — Physicists outside the work have responded cautiously to Microsoft's topological quantum computing claim, noting that the search for topological qubits and the "Majorana" particles underpinning them has a history of bold announcements later withdrawn. Researchers describe the technology as excruciatingly difficult to actually build.
  • Microsoft’s Majorana 1 Chip Carves New Path for Quantum Computing — Microsoft unveiled Majorana 1, a quantum chip built on a Topological Core architecture using a new materials stack of indium arsenide and aluminum, which the company expects will enable quantum computers capable of solving industrial-scale problems within years rather than decades. The topological superconductor produces a qubit that is fast, small, stable, and digitally controlled.
  • Meet Willow, Our State-of-the-Art Quantum Chip — Google reports that its Willow quantum chip completed a random circuit sampling benchmark computation in under five minutes that one of today's fastest supercomputers would take an estimated 10^25 years to perform. The benchmark is described as the classically hardest test currently runnable on a quantum computer.

AI Summary. Global average sea surface temperature reached 20.79C in May, the second-highest May level on record, while atmospheric carbon dioxide peaked at a global mean of 426 parts per million, up from 423 a year earlier. Scientists estimate the ocean absorbs a quarter to 30% of emitted carbon dioxide and about 90% of excess heat.

Attracta Mooney and Steven Bernard Financial Times
Date Posted:
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The world’s ocean temperatures reached the second-highest level on record for May, capping an “alarming” two-year streak of rapid warming. Atmospheric concentrations of CO2 hit their highest seasonal peak since records began, a global mean of 426 ppm.

Are ocean temperatures staying near record highs as carbon dioxide rises?

Core argument: Atmospheric CO₂ peaked globally at a mean of 426 parts per million in March, up from 423 ppm a year earlier, and surpassed 430 ppm at the Mauna Loa Observatory in Hawaii.

The world’s ocean temperatures reached the second-highest level on record for May, capping an “alarming” two-year streak of rapid warming and fueling concerns about the seas’ ability to absorb rising levels of carbon dioxide. The EU’s Earth observation service Copernicus said the global average sea surface temperature in May was 20.79C, 0.14C below the record in the same month in 2024. The level of CO₂ in the atmosphere peaked globally at the mean of 426 parts per million in March, up from 423 ppm a year ago, and surpassed 430 ppm at the Mauna Loa Observatory in Hawaii. Scientists estimate the ocean has absorbed between a quarter and about 30% of carbon dioxide released into the atmosphere and about 90% of excess heat, helping to keep temperatures on land cooler. But Michael Meredith, a scientist at the British Antarctic Survey in Cambridge, warned the ocean “may lose some of its capacity to buffer us against the worst extremes of climate change” by absorbing less warmth or carbon than previously. “We’re seeing stronger and stronger bursts of ocean warming — marine heatwaves — that are pushing us past records at an alarming rate.”

Takeaways by Macro Roundup® AI

  1. Atmospheric CO₂ peaked globally at a mean of 426 parts per million in March, up from 423 ppm a year earlier, and surpassed 430 ppm at the Mauna Loa Observatory in Hawaii.
  2. Scientists estimate the ocean has absorbed between a quarter and about 30% of carbon dioxide released into the atmosphere and about 90% of excess heat, and Michael Meredith of the British Antarctic Survey warned it may lose some of that buffering capacity.

Related Articles:

  • Long-term Surface Impact of Hunga Tonga-Hunga Ha’apai-like Stratospheric Water Vapor Injection — A volcanic eruption that injected large amounts of water vapor — a strong greenhouse gas — into the stratosphere is estimated to have raised surface temperatures by more than 1.5°C across large regions for several years, while cooling some areas by close to 1°C. The authors suggest a possible link to tropical Pacific sea surface temperatures that warrants further investigation.
  • Abrupt Reduction In Shipping Emission As An Inadvertent Geoengineering Termination Shock Produces Substantial Radiative Warming — Fuel regulations that abruptly cut sulfur dioxide emissions from international shipping by about 80% created an inadvertent geoengineering termination shock, and the authors estimate the resulting radiative forcing over the global ocean could double or more the rate of warming in the 2020s relative to the rate since 1980.
  • Take the Under — Downward revisions to global population and GDP projections make climate change appear more tractable, the author argues, since the scenarios used to model emissions rely on socio-economic assumptions that are more extreme than real-world observations. With slower population and economic growth, even partial policy successes could bring emissions consistent with a 2C target within reach.

Friday, June 13, 2025

AI Summary. The Budget Lab estimates that combining the One Big Beautiful Bill Act with recent tariff increases would reduce average annual after-tax-and-transfer income for the bottom 80% of households over 2026-2034, cutting incomes for the bottom 10% by more than 6.5% while raising incomes at the top by nearly 1.5%.

Ernie Tedeschi Yale University
Date Posted:
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The Yale Budget Lab projects that the combination of OBBBA and the tariffs in place as of June 1 results in a net income reduction of ~1% for the median household, a 6.5% reduction for the bottom 10% of households, and a 1.5% increase for the top 10%.

How do tax legislation and tariffs combined affect incomes across households?

Core argument: The Budget Lab estimates the combination of the One Big Beautiful Bill Act and 2025 tariffs would cut after-tax-and-transfer income by more than 6.5% on average for the bottom 10% of households over 2026–2034.

The Budget Lab has previously estimated the [10 yr] net budget impact of combining the OBBBA and recent increases in tariffs. Conventionally scored, OBBBA costs $2.4 trillion as written ($4.0 trillion if the temporary provisions become permanent). The tariffs implemented as of June 1 would raise $2.4 trillion. What is the net distributional impact of both the OBBBA and tariffs? The results of this exercise are shown in Figure 1, which reports average annual changes to after-tax-and-transfer income over the 2026-2034 period. We find that the combination of OBBBA and 2025 tariffs would reduce resources on average among the bottom 80 percent of households. The bottom ten percent of households would see an average reduction of more than 6.5 percent in incomes, while those at the top would see an increase of nearly 1.5 percent.

Takeaways by Macro Roundup® AI

  1. The Budget Lab estimates the combination of the One Big Beautiful Bill Act and 2025 tariffs would cut after-tax-and-transfer income by more than 6.5% on average for the bottom 10% of households over 2026–2034.
  2. The Budget Lab estimates the combination of the OBBBA and 2025 tariffs would reduce average resources for the bottom 80% of households while raising incomes at the top by nearly 1.5%.
  3. Conventionally scored, the OBBBA costs $2.4 trillion over 10 years, or $4.0 trillion if its temporary provisions become permanent, while tariffs implemented as of June 1 would raise $2.4 trillion, according to The Budget Lab.

Related Articles:

AI Summary. A $22bn auction of 30-year US Treasury bonds drew stronger-than-expected demand, with a yield of 4.844% and primary dealers left with 11.4% of the sale, their smallest share in months. The result eased concerns that budget deficits and trade conflict would deter investors from lending to the US government.

Michael Mackenzie Bloomberg
Date Posted:

A closely watched auction of 30-year Treasuries saw stronger-than-expected demand on Thursday. The $22B sale drew a yield of 4.84%, down 8 bps. The group of primary dealers that underwrite US Treasury debt offerings were awarded only 11.4% of the sale.

Are investors still willing to buy long-dated US government debt?

Core argument: The US Treasury's $22 billion 30-year bond sale drew a yield of 4.844%, below the yield around the auction deadline, a sign of solid demand after weeks of concern that budget deficits and Trump's trade war would deter buyers.

A closely watched auction of 30-year Treasuries saw stronger-than-expected demand on Thursday, easing for now worries that investors would shun the US government’s longest maturity. The $22 billion sale followed weeks of fretting over whether spiraling budget deficits and President Donald Trump’s trade war would deter buyers from lending to the US, but it drew a yield of 4.844%, below the yield around the auction deadline. That was a sign of solid appetite, and 30-year bonds proceeded to extend their gains, leaving the yield down about 8 basis points at around 4.84% in late afternoon New York trading. Underscoring the buying interest, the group of primary dealers that underwrite US Treasury debt offerings were awarded 11.4% of the sale, the lowest amount they’ve been left with since November. The result followed a well-received sale of 10-year notes on Wednesday. “The market continues to look for any evidence of a pullback in sponsorship for US Treasuries and this week’s pair of stop-throughs for 10s and 30s provided no such fodder for the bond vigilantes,” said Ian Lyngen, head of US rates strategy at BMO Capital Markets.

Takeaways by Macro Roundup® AI

  1. The US Treasury's $22 billion 30-year bond sale drew a yield of 4.844%, below the yield around the auction deadline, a sign of solid demand after weeks of concern that budget deficits and Trump's trade war would deter buyers.
  2. Primary dealers were awarded 11.4% of the 30-year sale, their lowest amount since November, and 30-year yields fell about 8 basis points to around 4.84% in late afternoon New York trading.
  3. BMO Capital Markets' Ian Lyngen said the pair of stop-throughs for 10-year and 30-year sales provided no fodder for bond vigilantes looking for evidence of a pullback in sponsorship for US Treasuries.

Related Articles:

AI Summary. Chinese car makers' price war has squeezed the industry's finances, with operating profit margins averaging 3.9% in the first quarter of 2025, down 0.7 percentage points year on year, and aggregate profits falling 6.2% to Rmb95bn. Leading car makers are delaying payments to suppliers to preserve working capital while funding heavy discounting.

Gloria Li and Haohsiang Ko Financial Times
Date Posted:

In an effort to shore up automotive supply chains, the Chinese government mandated a 60-day supplier payment rule. Most car makers suffer negative working capital; only a handful of Chinese EV makers have sufficient net cash to comply with the new rule.

Is China's car price war straining the industry's finances and suppliers?

Core argument: Chinese car makers' operating profit margins averaged 3.9% in the first quarter of 2025, down 0.7 percentage points year on year, while aggregate industry profits fell 6.2% to Rmb95bn amid heavy discounting.

Chinese car makers’ price war is putting the industry’s balance sheet under strain: in the first quarter of 2025, car makers’ operating profit margins averaged 3.9%, a drop of 0.7pp from a year earlier. The industry’s aggregate profits dropped 6.2% year on year to Rmb95bn in the three-month period. China’s leading car makers are being forced to squeeze suppliers to maintain working capital and fund their fight for market share amid heavy discounting. This week, major car companies committed to 60-day bill settlements with the aim of “ensuring supply chain stability”. Citi analysts note that only a handful of Chinese EV makers had sufficient net cash to cover the decline in cash reserves [following] the implementation of a shorter payment cycle. “Price wars…are pushing the industry into a vicious cycle,” the CAAM said last month, while asking “leading companies” not to monopolize the market or undermine the survival of other groups. China’s Ministry of Industry and Information Technology, the country’s top automotive regulator, said in a statement it supported the association and would expand its efforts to prevent a “rat race” and “unfair” competition.

Takeaways by Macro Roundup® AI

  1. Chinese car makers' operating profit margins averaged 3.9% in the first quarter of 2025, down 0.7 percentage points year on year, while aggregate industry profits fell 6.2% to Rmb95bn amid heavy discounting.
  2. China's leading car makers are squeezing suppliers to maintain working capital and fund their fight for market share, and major car companies have committed to 60-day bill settlements with the aim of "ensuring supply chain stability".
  3. Citi analysts note that only a handful of Chinese EV makers hold sufficient net cash to cover the decline in cash reserves from a shorter payment cycle, while the CAAM said price wars are pushing the industry into a "vicious cycle".

Related Articles:

  • How China Became A Car-Exporting Juggernaut — China never mastered internal-combustion engines, but the shift to mechanically simpler battery-powered vehicles — backed by an estimated $100bn of state investment over a decade — helped it become a major car exporter, shipping more than 10,000 cars a day. Battery-powered vehicles account for a third of Chinese car exports, versus 4% in Japan and 20% in Germany.
  • Why Europe’s Car Crisis Is Mostly Made In China — Volkswagen, which has never closed a factory in its German heartland, is weighing shutting three plants and cutting worker pay by 10% after warning on profits twice in a year. China has overtaken Japan as the world's largest car exporter, with Chinese manufacturers building advanced electric cars at costs said to be 30% below European rivals'.
  • China’s Auto Export Wave Echoes Japan’s in the ’70s — China never mastered internal-combustion engines, but the shift to mechanically simpler battery-powered vehicles — backed by an estimated $100bn of state investment over a decade — helped it become a major car exporter, shipping more than 10,000 cars a day. Battery-powered vehicles account for a third of Chinese car exports, versus 4% in Japan and 20% in Germany.

AI Summary. People across rich countries will inherit roughly $6tn in a year, about 10% of GDP, with bequests having climbed as a share of output in France, Germany and Italy. One analysis estimates that a rule splitting wealth between stocks and inflation-protected government bonds would have returned 10% annually in real terms since 1900, versus 6.6% for all-stocks.

Economist Staff The Economist
Date Posted:

As inheritances in the rich world rise to gilded age levels, Victor Haghani and James White calculate that an optimal mix of stocks and bonds since 1900 would have yielded 10% per year, exceeding the 6.6% from an all-stock strategy, with less volatility.

How can inherited fortunes be invested to survive across generations?

Core argument: People across the rich world will inherit some $6trn in 2025, about 10% of GDP, with French bequests doubling as a share of output since the 1960s, German bequests tripling since the 1970s, and Italian inheritances near 20% of GDP.

In 2025, people across the rich world will inherit some $6T or around 10% of GDP—a figure that has climbed sharply in recent decades. French bequests have doubled as a share of national output since the 1960s; those in Germany have tripled since the 1970s; Italian inheritances are now worth around 20% of GDP. At the turn of the 20th C, America’s census recorded about 4,000 millionaires. Suppose ¼ of them had at least $5m (the richest had hundreds) and had invested it in America’s stock market; their descendants today would include nearly 16,000 old-money billionaires. In reality, it is a struggle to find a single one who traces their fortune back to the first Gilded Age. Authors Victor Haghani and James White adopt a simple rule-of-thumb known as the “Merton share” that approximates the optimal split between stocks and inflation-protected government bonds, by comparing their expected returns and volatility. They calculated the annualized returns using this strategy since 1900 (using a proxy for inflation-linked bonds for before 1997). Had the Gilded Age crowd and their descendants invested in this manner, they would have scored an annualized real return of 10%, compared with 6.6% from the all-stock strategy, and it would also have been 40% less volatile.

Takeaways by Macro Roundup® AI

  1. People across the rich world will inherit some $6trn in 2025, about 10% of GDP, with French bequests doubling as a share of output since the 1960s, German bequests tripling since the 1970s, and Italian inheritances near 20% of GDP.
  2. America's census recorded about 4,000 millionaires at the turn of the 20th century; had a quarter of them held at least $5m invested in American stocks, their descendants would number nearly 16,000 old-money billionaires, yet it is a struggle to find a single one.
  3. Victor Haghani and James White calculate that the "Merton share" rule, which splits holdings between stocks and inflation-protected government bonds by comparing expected returns and volatility, would have delivered a 10% annualised real return since 1900, against 6.6% for all-stocks, with 40% less volatility.

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AI Summary. US survey data on college graduates indicate about 2.1M full-time workers first came to the country on student visas, earning a median salary of $115,000 versus $87,000 for native-born college graduates, a 32% premium. They work in research and development at more than twice the native-born rate and are more often self-employed.

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The 2.1M year-round, full-time workers in the United States who first came to the country on a student visa earn a median salary of $115,000, 32% higher than native-born counterparts, and are twice as likely to work in R&D or to become entrepreneurs.

Do workers who arrived on student visas out-earn native-born college graduates?

Core argument: The roughly 2.1M year-round, full-time US workers who first arrived on student visas earned a median salary of $115,000 in 2023, a 32% premium over the $87,000 median for native-born workers with at least a college degree, per the National Survey of College Graduates.

The National Survey of College Graduates looks at workers in the US with at least a bachelor’s degree, identifying immigrants who first arrived on a student visa. The data shows that workers who first come [to the US] on student visas not only thrive, but typically out-earn their native-born counterparts. As of 2023, there were about 2.1M year-round, full-time workers in the United States who first came to the country on a student visa. These workers earned a median salary of $115,000, compared with $87,000 for the median native-born worker with at least a college degree - a 32% premium. The data also shows that foreign graduates are more likely to work in jobs performing R&D at more than twice the rate of their native-born counterparts or to be entrepreneurs, both of which create beneficial spillovers and job opportunities for American workers. In 2023, 11.3% of student visa arrivals were self-employed, compared with 10.3% of native-born college graduates…and [they] are more likely to become entrepreneurs after obtaining permanent residency and citizenship.

Takeaways by Macro Roundup® AI

  1. The roughly 2.1M year-round, full-time US workers who first arrived on student visas earned a median salary of $115,000 in 2023, a 32% premium over the $87,000 median for native-born workers with at least a college degree, per the National Survey of College Graduates.
  2. Foreign graduates who first came to the US on student visas work in jobs performing R&D at more than twice the rate of their native-born counterparts.
  3. Among student visa arrivals, 11.3% were self-employed in 2023, compared with 10.3% of native-born college graduates, and they are more likely to become entrepreneurs after obtaining permanent residency and citizenship.

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