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


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
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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
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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.

Related Articles:

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.

Connor O’Brien Agglomerations
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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.

Related Articles:

Monday, June 16, 2025

AI Summary. China's import volumes have shown no growth since the end of 2022 while its export volumes rose 33%, according to data from the Netherlands Bureau of Economic Policy Analysis. In dollar terms, Chinese imports fell 11% from the US, 17% from Japan, and 18% from Germany, as Chinese companies replace overseas suppliers with domestic ones.

Jason Douglas and Clarence Leong Wall Street Journal
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According to a Dutch analysis, the volume of China’s imports hasn’t grown since 2022, while exports have risen 33% as its import substitution campaign gains speed. @Brad_Setser notes, “China’s vision of trade is exporting without importing.”

Is Chinese trade becoming a one-way street as imports stall?

Core argument: China's export volumes have risen 33% since the end of 2022 while its import volumes have not grown at all, according to data from the Netherlands Bureau of Economic Policy Analysis.

In volume terms, which adjust for the effect of exchange rates, Chinese imports through March haven’t grown at all since the end of 2022—while exports have rocketed 33% higher, according to data from the Netherlands Bureau of Economic Policy Analysis, a Dutch research institute. Chinese imports in dollar terms from the U.S. were down 11%. Imports from Japan were down 17%, and German imports were down 18%. Chinese companies say they are replacing overseas suppliers with China-based ones to “localize” their supply chains and push out imports—a trend given extra impetus by the trade conflict with the U.S. As recently as 2015, China imported some $70 million a year of railroad trucks, the wheel assemblies under railcars. In 2023, that had sunk to $1.4 million, according to Rhodium Group, a New York-based research group. State-owned companies in some sectors have been ordered to replace foreign software in their IT systems by 2027.

Takeaways by Macro Roundup® AI

  1. China's export volumes have risen 33% since the end of 2022 while its import volumes have not grown at all, according to data from the Netherlands Bureau of Economic Policy Analysis.
  2. Chinese imports in dollar terms fell 11% from the U.S., 17% from Japan and 18% from Germany, as Chinese companies say they are replacing overseas suppliers with China-based ones to "localize" supply chains.
  3. China's imports of railroad trucks, the wheel assemblies under railcars, fell from some $70 million a year in 2015 to $1.4 million in 2023, according to Rhodium Group.

Related Articles:

  • The Evolution of Global Trade in 2024 — Global trade imbalances consist of one very large surplus and one very large deficit: China's goods surplus exceeds $1tn a year, while the U.S. non-petroleum deficit drives the Asian surplus. The author argues a Chinese surplus this large can be sustained only alongside a large U.S. deficit.
  • A New ‘China Shock’ Is Destroying Jobs Around the World — Indonesia's textiles and apparel industry lost roughly 250,000 jobs over two years, with an industry association estimating another 500,000 at risk, amounting to one in four jobs in the sector. Researchers describe this as a new "China Shock," faster than the earlier wave that eliminated as many as 2.4m US jobs.
  • China Intensifies Push to ‘Delete America’ From Its Technology — A Chinese government directive requires state-owned companies in finance, energy, and other sectors to replace foreign software in their information technology systems by 2027, part of a broader push to remove U.S. technology. Hardware makers were targeted first, with Dell, IBM, and Cisco equipment gradually replaced by Chinese products.

AI Summary. Tariffs can only raise wages if they expand labor-intensive production, which is unlikely because highly labor-intensive US production would not be competitive even with very high tariffs. As consumption taxes, tariffs are regressive, and combined with tax legislation the author argues they deepen a large redistribution of after-tax income from poor to rich.

Paul Krugman Paul Krugman Substack
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Tariffs will not return highly labor-intensive production to the US, and thus will have little effect on inequality of market income. But, per the Budget Lab, “they’re part of a policy mix that will greatly increase inequality after taxes and transfers.”

Do tariffs raise wages or shift income from poor to rich?

Core argument: The Yale Budget Lab estimates that Trump's tariffs deepen the bottom decile's income decline from 4% to 6.5% after taxes and transfers, while having little effect at the top.

A tariff on labor-intensive imports can raise wages [only] if it leads to an expansion of labor-intensive production and employment. The Trump tariffs are unlikely to do that, because at this point highly labor intensive production in the United States won’t be competitive even with very high tariffs. Tariffs won’t have much effect on the inequality of market income either way, but as consumption taxes [they] are regressive because low-income households consume a much larger fraction of their income. The chart from the Yale Budget Lab chart combines the effects of the Trump tariffs and the One Big Beautiful Bill Act on income after taxes and transfers by decile (the black dots show the net effect), and [shows] a huge redistribution of income from the poor to the rich. The tariffs are an important part of that redistribution, turning a 4% income decline for the bottom decile into a 6.5% decline while having little effect at the top. Mildly regressive tariff hikes are being used to help finance extremely regressive tax cuts. Trump’s tariffs won’t reduce inequality before taxes and transfers. But they’re part of a policy mix that will greatly increase inequality after taxes and transfers.

Takeaways by Macro Roundup® AI

  1. The Yale Budget Lab estimates that Trump's tariffs deepen the bottom decile's income decline from 4% to 6.5% after taxes and transfers, while having little effect at the top.
  2. Tariffs function as consumption taxes and are regressive because low-income households consume a much larger fraction of their income, though they have little effect on the inequality of market income either way.
  3. A tariff on labor-intensive imports raises wages only if labor-intensive production and employment expand, which the Trump tariffs are unlikely to achieve because such U.S. production won't be competitive even at very high tariffs.

Related Articles:

  • Combined Distributional Effects of the One Big Beautiful Bill Act and of Tariffs — 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%.
  • Are Businesses Absorbing the Tariffs or Passing them on to Their Customers? — About three-quarters of manufacturing and service firms facing tariff-driven cost increases reported passing at least some of those costs to customers through higher prices, while roughly a quarter of each said they absorbed the full increase without raising prices. Nearly a third of manufacturers and about 45% of service firms reported full pass-through.

AI Summary. Sub-Saharan Africa's GDP per capita has fallen relative to the world average over three decades, from 30% to 22%, reflecting the region's inability to sustain growth. Had it grown at the global pace since 1990, income per capita would be over 40% higher; at emerging East Asia's pace, nearly 3x higher.

Cesar Calderon and Ayan Qu The World Bank
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In 1990, Sub-Saharan Africa’s GDP per capita was 30% of the world average. Btw 2014 and 2022, GDP per capita declined to 22% of the world’s mean. 50% of the world’s population growth over the next 15 years will occur in Africa.

Has Sub-Saharan Africa fallen further behind global living standards?

Core argument: Sub-Saharan Africa's real GDP per capita fell from 30% of the world average in 1990 to 25% by 2000, fluctuated near 25% through 2014, then declined to 22% by 2022.

When compared with the average living standards of the rest of the world, GDP per capita in Sub-Saharan Africa has declined over the past three decades. During the period 1990–2022, three distinct periods can be identified in the evolution of Sub-Saharan Africa’s real GDP per capita: a declining trend during 1990–2000 (from 30% to 25% of the world average), stagnant GDP per capita relative to the world during 2000-14 (fluctuating around 25%), and a declining trend from 2014 to 2022 (from 25% to 22% of the world average). The region’s lack of convergence in living standards with the rest of the world largely results from its inability to sustain growth over time. If Sub-Saharan Africa had grown (in per capita terms) at the same pace as the global economy since 1990, its level of income per capita in 2022 would have been more than 40% higher than its actual level. If it had grown at the same pace as emerging East Asia, the region’s income per capita would have been nearly three times its 2022 level. Currently home to 14% of the world’s working-age population, by 2100, Africa is projected to have 39%, representing more than a third of the workforce of the entire world.

Takeaways by Macro Roundup® AI

  1. Sub-Saharan Africa's real GDP per capita fell from 30% of the world average in 1990 to 25% by 2000, fluctuated near 25% through 2014, then declined to 22% by 2022.
  2. Had Sub-Saharan Africa matched global per capita growth since 1990, its 2022 income per capita would have been more than 40% higher, and matching emerging East Asia would have made it nearly three times its actual level.
  3. Africa holds 14% of the world's working-age population and is projected to hold 39% by 2100, more than a third of the entire global workforce.

Related Articles:

  • Exploring the Implications of Sub-Saharan Africa’s Demographic Explosion — Sub-Saharan Africa is projected to hold a quarter of the world's working-age population within a few decades and to surpass China's working-age population in roughly a decade. Even with modest productivity growth near 2%, the region's growth is estimated at 4.5–5.5%, raising its share of global output from about 3% while remaining small.
  • Changing Sub-Saharan Africa’s Growth Trajectory — Sub-Saharan Africa's working-age population is growing nearly 3% a year, versus close to zero in much of the world, and is projected to exceed China's within about a decade and reach a quarter of the global total. With modest productivity growth near 2%, the region is likely among the world's fastest-growing.
  • Could T-Shirts Be The Way to Industrialise an African Nation? — Benin, Africa's largest cotton producer, exports nearly all of its roughly 300,000 tonnes of lint cotton raw, mostly to Bangladesh, and industry experts estimate it forgoes more than 90% of the value by not processing it domestically. The World Bank reports manufacturing's share of GDP in sub-Saharan Africa, excluding high-income countries, fell from 18% to 11%.

AI Summary. Labor force participation among prime-age men (25–54) in the US has declined since the global financial crisis, making the US an outlier among advanced economies, while participation among young women has risen. The author argues the timing points to a lack of opportunity for young men, which would help explain their drift toward populism.

Robin Brooks Robin Brooks Substack
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The decline in labor force participation by white men 25–54 accelerated post-2008, leading @robin_j_brooks to speculate that it is fundamentally driven by “a lack of opportunity.” During that same time period, LFP for white women 25–54 rose.

Does declining work among young men explain their turn toward populism?

Core argument: Labor force participation among US prime-age men (25–54) began declining after the 2008 global financial crisis, making the US an outlier relative to most other advanced economies.

The decline in labor force participation among prime-age (25 - 54) men in the US began after the global financial crisis and makes the US an outlier relative to most other advanced economies. The charts show labor force participation rates (LFPR) for men and women in two age groups: 25 - 34 and 35 - 44. Young prime-age men have seen participation rates fall across almost all population groups, while the opposite is true for young women. Participation dropped after the 2008 crisis, which likely makes it about less opportunity rather than better video games. At the same time, the rise in participation among young women - especially since COVID - is unambiguously positive, but - unfortunately - that doesn’t prevent the political polarization that’s happened because of what’s going on with young men. It’s hard to know exactly what is driving the drop in participation among young men. No doubt there are many - perhaps countervailing - factors at play. However, given the turning point that 2008 represents, it seems fairly obvious that the drop is about a lack of opportunity, which would explain the drift towards populism among young men.

Takeaways by Macro Roundup® AI

  1. Labor force participation among US prime-age men (25–54) began declining after the 2008 global financial crisis, making the US an outlier relative to most other advanced economies.
  2. Participation rates have fallen for young prime-age men across almost all population groups, while rising for young women, especially since COVID.
  3. The author argues that the 2008 turning point points to a lack of opportunity, rather than better video games, as the driver of falling participation among young men, which would explain their drift toward populism.

Related Articles:

  • Out of Work and On the Dole — Is Uncle Sam Contributing to Young Men’s Malaise? — The share of US men ages 25–40 not in the labor force rose from 5% in 1976 to 11% in 2024, with more than 1 in 4 not working full-time; the increase was 165% among less-educated men versus 79% among college graduates. Of those not in the labor force, 40% received cash or cash-equivalent government benefits.
  • Post-Pandemic Recovery for America’s Prime Age Labor Force: A Tale of Two Sexes — Prime-age women's labor force participation climbed about 5 points above its pre-pandemic level over a decade, while prime-age men's rose barely a point, only just regaining pre-pandemic levels. Despite economic expansion and labor shortages, work rates for prime-age American men are barely as high as at the trough of the severe Reagan-era recession.
  • Wage Inequality and the Rise in Labor Force Exit: The Case of US Prime-Age Men — Among US prime-age men without college degrees, a 10% rise in expected earnings is associated with a 0.12 percentage point lower labor force exit rate, while a 10% rise in peers' reference earnings is associated with a 0.13 percentage point higher exit rate, fully offsetting the earnings effect.

AI Summary. Unemployment among 20–24 year-olds with at least a bachelor's degree averaged 6.6% over a 12-month period, up from 6% a year earlier, while the national rate stood around 4%. For 18–19 year-old high-school graduates with no college, unemployment averaged 14.5%, up from 13.3%.

Justin Lahart and Te-Ping Chen Wall Street Journal
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The 6.6% unemployment rate for new college graduates aged 20 – 24 is at its highest level in a decade, well above the national rate of ~ 4%. HS graduates ages 18 – 19 with no college averaged a rate of 14.5%, up from 13.3% over the prior 12-month period.

Is unemployment rising faster for young graduates than nationally?

Core argument: Unemployment among job-seeking college graduates ages 20–24 averaged 6.6% over the 12 months ending in May, up from 6% a year earlier and about the highest in a decade excluding the pandemic spike, according to Labor Department data.

Recent college and high-school graduates are facing an employment crisis. The overall national unemployment rate remains around 4%, but for new college graduates looking for work, it is much higher: 6.6% over the past 12 months ending in May. That is about the highest level in a decade—excluding the pandemic unemployment spike—and up from 6% for the 12-month period a year earlier. That rate, based on data from the Labor Department, applies to people ages 20 to 24 looking for work who have at least a bachelor’s degree. (This group is mostly people 21 to 24, since few people graduate college sooner.) The environment is even rougher for people without degrees: High-school graduates ages 18 to 19 with no college averaged an unemployment rate of 14.5% over the past 12 months. That is up from 13.3% over the prior 12-month period.

Takeaways by Macro Roundup® AI

  1. Unemployment among job-seeking college graduates ages 20–24 averaged 6.6% over the 12 months ending in May, up from 6% a year earlier and about the highest in a decade excluding the pandemic spike, according to Labor Department data.
  2. High-school graduates ages 18–19 with no college averaged a 14.5% unemployment rate over the past 12 months, up from 13.3% in the prior 12-month period.
  3. The national unemployment rate remains around 4%, below the 6.6% rate for new college graduates ages 20–24 looking for work.

Related Articles:

  • Educated but Unemployed, a Rising Reality for College Grads — 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%.
  • 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.

AI Summary. US Treasuries held at the Federal Reserve on behalf of foreign central banks and other official entities have fallen by $48bn, alongside a roughly $15bn drop in foreign holdings at the Fed's reverse repurchase facility. Bank of America strategists call this unusual given the weak dollar and read it as official-sector diversification away from dollar holdings.

Ye Xie Bloomberg
Date Posted:

Central banks are not responding to dollar weakness as they historically have. Though Bloomberg’s Spot Dollar Index is down ~8% since the start of 2025, Treasuries held by official entries at the New York Federal Reserve have fallen $48B since March.

Are foreign official holders diversifying away from Treasuries?

Core argument: Treasuries held for global central banks and other official entities in custody at the New York Fed fell $17 billion in the week through June 11 on average, extending declines since late March to $48 billion.

Treasuries held by global central banks and other official entities in custody at the New York Federal Reserve fell $17 billion in the week through June 11 on average, extending their declines since late March to $48 billion. In addition, foreign holdings in the Fed’s reverse repurchase agreement facility have dropped roughly $15 billion since late March. The decline is “unusual” because central banks typically buy Treasuries when the dollar is weak, as it has been this year, [Bank of America strategists] led by Meghan Swiber wrote in a note Monday, with the title “Foreign UST demand shows cracks.” International appetite for Treasuries has been under increasing scrutiny in recent months. President Donald Trump’s trade and fiscal policies have roiled financial markets and fueled speculation that overseas buyers will shun US assets — the so-called Sell America trade. “This flow likely reflects official sector diversification away from USD holdings,” wrote the strategists, adding that they “remain worried about the outlook for foreign demand.”

Takeaways by Macro Roundup® AI

  1. Treasuries held for global central banks and other official entities in custody at the New York Fed fell $17 billion in the week through June 11 on average, extending declines since late March to $48 billion.
  2. Bank of America strategists led by Meghan Swiber call the decline "unusual" because central banks typically buy Treasuries when the dollar is weak, as it has been this year, and say the flow likely reflects official sector diversification away from dollar holdings.
  3. Foreign holdings in the Federal Reserve's reverse repurchase agreement facility have dropped roughly $15 billion since late March, and Bank of America strategists wrote that they "remain worried about the outlook for foreign demand.".

Related Articles:

  • The Dollar has Further to Fall — The author argues the dollar has considerably further to fall, noting Federal Reserve data show its real value nearly two standard deviations above its average since 1973, a level matched only twice before, each followed by depreciations of 25-30%. Financing the $1.1tn US current account deficit requires matching net capital inflows.
  • 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.
  • 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. Gold prices reached a record intraday high in real terms, surpassing the prior 1980 peak, with roughly a 30% gain over the year. Central banks have bought more than 1,000 tonnes net annually for three years — record levels — led by emerging markets including China, India and Turkey as they scale back dollar exposure.

Leslie Hook and Ian Smith Financial Times
Date Posted:

Safe haven buying has caused gold prices to rise ~30% this year, and to “reach a record intraday high in April in real terms, adding to a rally that was already being stoked by central bank purchases, particularly in emerging markets.”

Are central banks driving gold to record highs by reducing dollar exposure?

Core argument: Gold prices reached a record intraday high in real terms in April, surpassing the previous peak set in 1980, and have risen about 30% this year on safe haven buying.

The price of bullion surged to a record intraday high in April in real terms, passing the previous record set in 1980 and has risen about 30% this year. The safe haven buying has added to a rally that was already being stoked by central bank purchases, particularly in emerging markets. Central banks hold reserve assets as a kind of rainy day fund to see themselves through periods of economic turbulence. Unlike other big investors, they are not looking to invest with assets that provide an outsized return, but rather those that will hold their value in a crisis, and be easy to sell. For decades, that has been dollar assets, given that the $29tn US Treasuries market is the world’s largest and most liquid bond market. But in recent years, central banks’ reserve managers have been working to scale back their dollar exposure. Central bank net purchases of gold have been more than 1,000 tonnes each year for the past three years — record levels. The biggest growth in purchases has come from emerging-market countries that are not closely aligned with the west, including China, India and Turkey.

Takeaways by Macro Roundup® AI

  1. Gold prices reached a record intraday high in real terms in April, surpassing the previous peak set in 1980, and have risen about 30% this year on safe haven buying.
  2. Central bank net purchases of gold have exceeded 1,000 tonnes in each of the past three years, record levels, with the largest growth coming from emerging markets including China, India and Turkey.
  3. Central banks hold reserves that retain value in a crisis and are easy to sell, a role long filled by dollar assets given the $29tn US Treasuries market, but reserve managers have been scaling back dollar exposure.

Related Articles:

  • Gold Overtakes Euro as Global Reserve Asset, ECB Says — 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.
  • Taking Stock: Dollar Assets, Gold, and Official Foreign Exchange Reserves — Gold accounts for about 10% of aggregate official foreign exchange reserves, roughly its level in the early 2000s. International Monetary Fund country data indicate most added official gold holdings came from a few central banks, with over half of reported accumulation from China and Russia and about a quarter from several emerging markets.
  • 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.