Edward Conard

Top Ten New York Times Bestselling Author

  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


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
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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
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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.

Tuesday, June 17, 2025

AI Summary. Investment funds' share of US Treasury auction purchases rose from 1.7% to 67.8% while dealers and brokers' share fell from 79% to 19.4%, yet the Federal Reserve's secondary-market operations still run exclusively through primary dealers. Widening eligibility to non-bank financial institutions could supply liquidity more directly and aid policy pass-through.

Nina Boyarchenko and Or Shachar Journal of Economic Perspectives
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Investment funds’ participation in Treasury auctions rose from 1.7% to 67.8% btw Jan. 2008 and Oct. 2023, largely replacing broker-dealers. Commensurate extension of Fed open market operations to non-bank institutions could improve market liquidity.

Should the Fed expand its market operations beyond primary dealers?

Core argument: Investment funds' share of Treasury auction participation rose from 1.7% in January 2008 to 67.8% in October 2023, while dealers' and brokers' share fell from 79% to 19.4% over the same period.

The Federal Reserve has historically relied on banks and primary dealers, [but] the landscape for fixed income ownership shifted after the 2007–2009 financial crisis, and again after the March 2020 crisis. As of the end of 2024, [non-bank financial institutions] are more than three times larger than the US banking system. Participation of investment funds—including mutual funds, money market funds, hedge funds, money managers, and investment advisors—in auctions of Treasury securities increased from 1.7% in January 2008 to 67.8% in October 2023, whereas the share attributable to dealers and brokers’ share decreased from 79% to 19.4% during the same period. The counterparties of the Fed’s open market operations in the secondary market, however, still rely exclusively on primary dealers. Expanding the eligibility criteria for the Fed’s Treasury operations to include operations similar to non-bank financial institutions’ participation in the primary market, allowing a broader mix of participants to sell Treasuries to the Fed directly, could provide liquidity to the market more directly and immediately, thereby supporting the pass-through of the Fed’s policy.

Takeaways by Macro Roundup® AI

  1. Investment funds' share of Treasury auction participation rose from 1.7% in January 2008 to 67.8% in October 2023, while dealers' and brokers' share fell from 79% to 19.4% over the same period.
  2. Non-bank financial institutions were more than three times larger than the US banking system as of the end of 2024, following shifts in fixed income ownership after the 2007–2009 financial crisis and the March 2020 crisis.
  3. The Federal Reserve's secondary-market open market operations still rely exclusively on primary dealers, and broadening eligibility to let a wider mix of participants sell Treasuries directly to the Fed could provide liquidity more directly and support policy pass-through.

Related Articles:

  • Rapidly Growing Treasury Supply Crowding Out Other Types of Credit Growth — Roughly half of all fixed income issuance coming to market over the past year has been US Treasuries, meaning investors must allocate a growing share of dollars to financing the government. The argument is that lower government debt would free up more funds for consumer borrowing and business 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.
  • Our Thoughts on Large US Deficits and Their Impact on Bond Yields — Total borrowing in the US is about average despite high government deficits, as high public borrowing has contributed to the need for higher interest rates that have depressed private sector borrowing. Risk premiums on long-dated debt look about average, with no market signs that economic or debt limits are currently being hit.

AI Summary. U.S. carbon dioxide emissions from fossil fuels moved closely with GDP from 1992 to about 2005, after which the two decoupled, with GDP continuing to rise while emissions fell.

Roger Pielke Jr. The Honest Broker
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Between 1992 and 2025, the US economy significantly decarbonized; the ratio of carbon dioxide emissions to GDP fell from ~ .44 to ~.19, largely being driven by the replacement of coal by natural gas.

Has U.S. economic growth decoupled from carbon dioxide emissions?

Core argument: U.S. decarbonization, measured as fossil-fuel carbon dioxide emissions divided by GDP in 2025 dollars, is charted from 1992 to 2025.

The figure shows the decarbonization of the U.S. economy from 1992 to 2025 — with decarbonization as defined as the ratio of carbon dioxide emissions (from fossil fuels) to GDP (in 2025$). From 1992 to 2005, increasing GDP was fairly tightly coupled to increasing emissions of carbon dioxide. Then, in about 2006, things changed — since then, GDP has been decoupled from emissions of carbon dioxide — GDP has continued to increase as emissions fall.

Takeaways by Macro Roundup® AI

  1. U.S. decarbonization, measured as fossil-fuel carbon dioxide emissions divided by GDP in 2025 dollars, is charted from 1992 to 2025.
  2. From 1992 to 2005, rising U.S. GDP was fairly tightly coupled to rising carbon dioxide emissions from fossil fuels.
  3. Beginning around 2006, U.S. GDP decoupled from carbon dioxide emissions, with GDP continuing to increase as emissions fall.

Related Articles:

  • 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.
  • 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.
  • World’s Oceans Remain Near Record Temperatures as CO2 Levels Rise — 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.

AI Summary. Prime-age male labor force participation in the US fell after 2008 and never rebounded, making the US an outlier among advanced economies. Even so, US prime-age male employment-to-population ratios compare favorably with those countries, because the odds of finding a job are high for those in the labor force.

Robin Brooks Robin Brooks Substack
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The US prime-age employment-to-population ratio and the job-finding rate for those in the labor force are ~at the European mean. But the US participation rate has fallen below 90%, on par with Italy at the bottom of the pack, driven by men ages 25–34.

Why do American prime-age men participate less but find jobs easily?

Core argument: Prime-age male labor force participation in the US fell after 2008 and never rebounded, making the US something of an outlier among key advanced economies.

The fact that there’s a rising number of men on the sidelines jars with the perception of the US labor market as vibrant and dynamic. There’s actually no contradiction. The left chart shows labor force participation rates for men in prime working-age across key advanced economies. Participation in the US fell after 2008 and never rebounded, which makes the US something of an outlier versus other advanced countries. The right chart shows prime-age employment-to-population ratios for the same set of countries. Even though participation in the US is low, employment of prime-age men compares favorably to other advanced economies, because - provided you’re in the labor force - the odds of getting a job in the US are high. The fact that the American jobs machine is vibrant makes it all the more tragic that a rising number of men have been left on the sidelines.

Takeaways by Macro Roundup® AI

  1. Prime-age male labor force participation in the US fell after 2008 and never rebounded, making the US something of an outlier among key advanced economies.
  2. US prime-age male employment-to-population ratios compare favorably with other advanced economies despite low participation, because the odds of getting a job in the US are high for those in the labor force.
  3. The rising number of US men on the sidelines coexists with a vibrant American jobs machine rather than contradicting it.

Related Articles:

  • How Did We End Up Here? — 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.
  • 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.

AI Summary. Goldman Sachs estimates, using census data, that immigrants living in the U.S. illegally make up about 4.4% of the U.S. workforce overall but far more in some industries: 19% of landscaping services, 17% of crop production, 16% of animal slaughtering and processing, and 13% of construction.

Arian Campo-Flores, Rebecca Picciotto, Patrick Thomas and Tarini Parti Wall Street Journal
Date Posted:
Is Database:
Database

Illegal immigrants constitute ~ 4.4% of the overall American workforce according to a GS analysis, but make up 13% of construction workers, 16% of animal slaughtering and processing workers, and 17% of farm workers.

How concentrated are unauthorized immigrant workers in specific US industries?

Core argument: Immigrants living in the U.S. illegally make up about 4.4% of the U.S. workforce overall but far more in specific industries: 19% in landscaping services, 17% in crop production, 16% in animal slaughtering and processing and 13% in construction, according to a Goldman Sachs analysis of 2023 census data.

Immigrants living in the U.S. illegally account for about 4.4% of the U.S. workforce, according to a Goldman Sachs analysis of 2023 census data. But their share of the workforce in some industries is much higher, the analysis found: 19% in landscaping services, 17% in crop production, 16% in animal slaughtering and processing and 13% in construction. Roughly 12 million people immigrated to the U.S. from 2021 to 2024, according to the Congressional Budget Office, many of them either illegally or through an emergency process set up by the Biden administration. Many now have some kind of temporary permission to stay in the country and work, though they could ultimately face removal. Others sneaked into the country or overstayed visas. Immigration helped cool a job market that was in danger of overheating by “rebalancing the tightest parts of the labor market, where wage and price pressures were most extreme,” Goldman Sachs economists wrote in a note last year.

Takeaways by Macro Roundup® AI

  1. Immigrants living in the U.S. illegally make up about 4.4% of the U.S. workforce overall but far more in specific industries: 19% in landscaping services, 17% in crop production, 16% in animal slaughtering and processing and 13% in construction, according to a Goldman Sachs analysis of 2023 census data.
  2. Roughly 12 million people immigrated to the U.S. from 2021 to 2024, according to the Congressional Budget Office, many illegally or through an emergency process set up by the Biden administration, with many now holding temporary permission to stay and work.
  3. Goldman Sachs economists wrote that immigration helped cool a job market in danger of overheating by rebalancing the tightest parts of the labor market, where wage and price pressures were most extreme.

Related Articles:

  • America’s Immigration Mess: An Illustrated Guide — Current Population Survey estimates indicate America's foreign-born population surpassed 50m for the first time and exceeded 15% of the national population, above the prior peak of 14.8% recorded in 1890. Mass immigration during that earlier wave was associated in contemporary opinion with widening income and wealth gaps and depressed wages for less-skilled native-born men, and sweeping national restrictions followed.
  • Deporting Undocumented Workers Will Make Housing More Expensive — Undocumented workers make up a substantial share of homebuilding occupations, with construction laborers the most affected by mass deportation, according to estimates from the Center for American Progress. The author argues that any wage gains for some American workers would be outweighed by higher housing costs, reduced housing supply, and construction delays.

AI Summary. U.S. consumer price inflation has run at a 2.3% annualized rate, close to the pre-pandemic average of 2.1%, but personal consumption price and hourly pay data suggest underlying inflation is stuck 1–1.5 percentage points above its pre-pandemic pace. Producer price data for manufactured goods point to upside inflation risk from higher input costs.

Matt Klein The Overshoot
Date Posted:

Underlying inflation is running ~ 1–1.5pp above its pre-pandemic rate. @M_C_Klein notes, “With underlying inflation holding steady and the potential for tariffs to push things further, price risks seem to be skewed towards the upside.”

Is underlying inflation still running above its pre-pandemic pace?

Core argument: Annualized headline U.S. CPI inflation so far in 2025 is 2.3%, barely faster than the pre-pandemic average of 2.1% a year, with rent increases now fully decelerated to their pre-pandemic pace.

Traders responded to the latest batch of U.S. inflation releases as if the news were benign. One reason is that tariffs do not seem to have had much of an impact (yet). This is likely temporary and attributable to the massive stockpiles of imported inventories accumulated before any tariffs kicked in.) At the same time, the pace of rent increases has now fully decelerated to the pre-pandemic pace. The annualized headline CPI inflation rate so far in 2025 is just 2.3%, barely faster than the pre-pandemic average rate of 2.1% a year. [Yet] a closer look suggests that there is less to this improvement than meets the eye. The PCE index, as well as the monthly data on hourly pay, [suggest that] underlying inflation seems stuck around 1-1.5pp faster at a yearly rate than before the pandemic, [and the] latest Producer Price Index (PPI) data on what businesses in America are charging customers for manufactured goods suggests that there is considerable upside risk to inflation coming from higher input costs.

Takeaways by Macro Roundup® AI

  1. Annualized headline U.S. CPI inflation so far in 2025 is 2.3%, barely faster than the pre-pandemic average of 2.1% a year, with rent increases now fully decelerated to their pre-pandemic pace.
  2. The PCE index and monthly hourly pay data suggest underlying U.S. inflation is stuck around 1–1.5pp faster at a yearly rate than before the pandemic.
  3. Tariffs have not yet had much impact on U.S. prices, likely a temporary result of imported inventories stockpiled before tariffs took effect, while Producer Price Index data on manufactured goods suggest considerable upside inflation risk from higher input costs.

Related Articles:

  • 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.
  • 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.