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


Wednesday, June 25, 2025

AI Summary. Researchers surveyed 1,500 workers and AI experts across 844 tasks in 104 occupations, building a database that pairs worker preferences for automation with expert assessments of AI capability. The framework introduces a five-point Human Agency Scale and sorts tasks into zones where automation is both wanted and feasible, unwanted, or technically lacking.

Erik Brynjolfsson, Yijia Shao, Humishka Zope, Yucheng Jiang, et al. arXiv
Date Posted:
Is Database:
Database

A large dataset on preferences of workers and capability assessments from AI experts suggests a mismatch between actual AI usage by task and a Human Agency Scale that rates its suitability to the task, taking into account both tastes and capabilities.

Where do worker preferences for automation align with AI capability?

Core argument: The WORKBank database, built on the U.S. Department of Labor's O*NET database, records preferences from 1,500 domain workers and AI-expert capability assessments across over 844 tasks spanning 104 occupations.

Our framework features an audio-enhanced mini-interview to capture nuanced worker desires and introduces the Human Agency Scale (HAS) to quantify the preferred level of human involvement. [Our] WORKBank database, building on the U.S. Department of Labor’s O*NET database, captures preferences from 1,500 domain workers and capability assessments from AI experts across over 844 tasks spanning 104 occupations. We construct the Human Agency Scale (HAS), a 5-point scale that captures a spectrum from full automation to full human control, moving beyond a simple automate-or-not dichotomy. Jointly considering the desire and technological capability, it divides tasks in WORKBank into four zones: Automation “GreenLight” Zone, Automation “RedLight” Zone, R&D Opportunity Zone, LowPriorityZone. This highlights critical mismatches and opportunities for AI agent development. Our results reveal diverse HAS profiles across occupations, reflecting heterogeneous expectations for human involvement. We emphasize the need to align AI development with worker preferences and to support collaborative human-AI work arrangements.

Takeaways by Macro Roundup® AI

  1. The WORKBank database, built on the U.S. Department of Labor's O*NET database, records preferences from 1,500 domain workers and AI-expert capability assessments across over 844 tasks spanning 104 occupations.
  2. The Human Agency Scale is a 5-point measure spanning full automation to full human control, moving beyond a binary automate-or-not framing.
  3. Combining worker desire with technological capability sorts WORKBank tasks into four zones — Automation "GreenLight," Automation "RedLight," R&D Opportunity, and Low Priority — highlighting mismatches and opportunities for AI agent development.

Related Articles:

  • Navigating the Future of Work — Demographic groups whose work has been more displaced by automation have seen slower real wage growth, and automation is estimated to account for about 70% of between-group wage inequality in the US since 1980. Establishments adopting artificial intelligence have slowed hiring of non-AI workers by more than they have added AI specialists.
  • Generative AI at Work — A study of 5,179 customer support agents finds that access to a generative AI conversational assistant raised issues resolved per hour by 14% on average, with the largest gains for novice and low-skilled workers and minimal effect on experienced, highly skilled ones. The authors also find AI assistance improved customer sentiment, reduced requests for managerial intervention, and improved employee retention.
  • The Rapid Adoption of Generative AI — A nationally representative U.S. survey found 39% of people aged 18-64 used generative AI, with more than 24% of workers using it in the prior week and nearly one in nine using it every workday. The authors estimate 0.5-3.5% of U.S. work hours are currently assisted by generative AI.

AI Summary. Data compiled by Oxford University researchers shows the United States, China and the European Union host more than half of the world's most powerful data centers, with American and Chinese companies operating more than 90% of those rented out for artificial intelligence work. U.S. firms run almost two-thirds of global AI computing hubs, most using Nvidia chips.

Adam Satariano and Paul Mozur New York Times
Date Posted:

American companies operate almost two-thirds of A.I. data centers globally. Only 16% of nations have AI data centers.

Are the world's AI data centers concentrated in a few countries?

Core argument: U.S. companies operated 87 AI computing hubs, almost two-thirds of the global total, compared with 39 operated by Chinese firms and six by European firms, according to data compiled by Oxford University researchers.

According to data compiled by Oxford University, researchers the United States, China and the European Union host more than half of the world’s most powerful data centers, which are used for developing the most complex A.I. systems. American and Chinese companies operate more than 90% of the data centers that other companies and institutions use for A.I. work, according to the Oxford data. U.S. companies operated 87 A.I. computing hubs, which can sometimes include multiple data centers, or almost two-thirds of the global total, compared with 39 operated by Chinese firms and six by Europeans, according to the research. Inside the data centers, most of the chips — the foundational components for making calculations — were from the U.S. chipmaker Nvidia. Globally, the United States has the lead, with American companies building 63 A.I computing hubs outside the country’s borders, compared with 19 by China, according to the Oxford data. All but three of the data centers operated by Chinese firms outside their home country use chips from Nvidia, despite efforts by China to produce competing chips. Chinese firms were able to buy Nvidia chips before U.S. government restrictions.

Takeaways by Macro Roundup® AI

  1. U.S. companies operated 87 AI computing hubs, almost two-thirds of the global total, compared with 39 operated by Chinese firms and six by European firms, according to data compiled by Oxford University researchers.
  2. American companies built 63 AI computing hubs outside U.S. borders, compared with 19 by China, and all but three of the data centers Chinese firms operate abroad use Nvidia chips, which those firms could buy before U.S. government restrictions.

Related Articles:

  • AI Arrives In The Middle East: US Strikes A Deal with UAE and KSA — U.S. artificial intelligence agreements with the United Arab Emirates and Saudi Arabia bypass prior export-control rules, unlocking large-scale Gulf capital for AI infrastructure both in the region and in the United States. The author argues the deals tie both states more closely to American technology and position the energy-rich Gulf as a major AI hub.
  • Back to our Regularly Scheduled Programming — The four largest US hyperscalers spent $440bn on capital expenditure and research in 2024, with $596bn projected for 2025, a 35% increase, leaving large gaps between AI spending and AI revenues. These firms account for more than half of all capital expenditure growth in the US equity market.
  • Microsoft’s Datacenter Freeze – 1.5GW Self-Build Slowdown & Lease Cancellation Misconceptions — Reported cancellations of about 2GW of Microsoft datacenter capacity cover only non-binding letters of intent, while the company holds roughly 5GW of pre-leased capacity under binding contracts slated to begin operating between 2025 and 2028. The authors estimate Microsoft accounted for more than 60% of all newly leased turnkey datacenter capacity over a recent six-quarter stretch.

AI Summary. Computing is estimated to have accounted for 8% of US commercial sector electricity consumption and is projected to reach 20% by 2050, potentially exceeding every other commercial end use including lighting, space cooling, and ventilation. The projections assume computing growth outpaces efficiency gains, contributing to a reversal in declining commercial electricity use per square foot.

Courtney Sourmehi Energy Information Administration
Date Posted:

Computing accounted for 8% of commercial sector electricity consumption in 2024 and is projected to more than double to 20% by 2050. More electricity could be consumed by computing than for any other end use in the commercial sector.

Will computing become the largest user of commercial electricity?

Core argument: Computing accounted for an estimated 8% of commercial sector electricity consumption in 2024 and is projected to reach 20% by 2050, potentially exceeding every other commercial end use, including lighting, space cooling, and ventilation.

Computing accounted for an estimated 8% of commercial sector electricity consumption in 2024 and grows to 20% by 2050. Ultimately, more electricity could be consumed by computing than for any other end use in the commercial sector, including lighting, space cooling, and ventilation. We expect commercial computing growth will outpace computing efficiency improvements which, in the past, have moderated the growth in electricity consumption associated with computers. Commercial computing electricity demand growth is significant enough in our projections to contribute to a reversal in the trend in declining commercial electricity intensity, as measured in kilowatt hours consumed per square foot.

Takeaways by Macro Roundup® AI

  1. Computing accounted for an estimated 8% of commercial sector electricity consumption in 2024 and is projected to reach 20% by 2050, potentially exceeding every other commercial end use, including lighting, space cooling, and ventilation.
  2. Commercial computing growth is projected to outpace computing efficiency improvements, which in the past moderated growth in electricity consumption associated with computers.
  3. Projected commercial computing electricity demand growth is large enough to contribute to a reversal in the declining trend in commercial electricity intensity, measured in kilowatt hours consumed per square foot.

Related Articles:

  • The Future of Cooling — Over half of the world's 1.6bn air conditioners are in just two countries, China with 570m units and the United States with 375m, and nearly 70% of all units globally are in residential buildings. Household ownership ranges from about 4% in India and under 10% in Europe to over 90% in the United States and Japan.
  • After More Than a Decade of Little Change, U.S. Electricity Consumption is Rising Again — U.S. electricity consumption is projected to rise to new record highs, growing an average 1.7% per year, in contrast with the relatively flat demand from the mid-2000s to the early 2020s. The commercial sector, which includes data centers, and the industrial sector are projected to grow faster, at 2.6% and 2.1% per year, versus 0.7% for households.
  • 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.

AI Summary. A possible US trade strategy would hold tariffs at 30% on China and 10% on all other countries while giving trading partners 12 months to lower non-tariff barriers. The author argues this would immediately reduce uncertainty, aiding business planning, employment, and markets, while generating $400bn in annual revenue.

Torsten Sløk Apollo
Date Posted:

Approaching the Trump administration’s self-imposed 90-day deadline for trade deals, Torsten Sløk posits that extending the deadline by one year would leave trade partners “happy” with 10% and Trump with $400B of annual revenue.

Would fixed tariff rates plus a year to negotiate reduce uncertainty?

Core argument: Maintaining 30% tariffs on China and 10% on all other countries could produce $400 billion of annual revenue for US taxpayers while leaving trade partners satisfied with the 10% rate, the author speculates.

As we approach the Trump administration’s self-imposed 90-day deadline for trade deals, markets are starting to speculate about what comes next. The longer uncertainty remains elevated, the more negative its impact on the economy. Maybe the strategy is to maintain 30% tariffs on China and 10% tariffs on all other countries and then give all countries 12 months to lower non-tariff barriers and open up their economies to trade. Extending the deadline one year would give countries and US domestic businesses time to adjust to the new world with permanently higher tariffs, and it would also result in an immediate decline in uncertainty, which would be positive for business planning, employment, and financial markets. This would seem like a victory for the world and yet would produce $400 billion of annual revenue for US taxpayers. Trade partners will be happy with only 10% tariffs and US tax revenue will go up. Maybe the administration has outsmarted all of us.

Takeaways by Macro Roundup® AI

  1. Maintaining 30% tariffs on China and 10% on all other countries could produce $400 billion of annual revenue for US taxpayers while leaving trade partners satisfied with the 10% rate, the author speculates.
  2. Extending the Trump administration's 90-day trade-deal deadline by 12 months would give countries and US domestic businesses time to adjust to permanently higher tariffs and to lower non-tariff barriers, according to the author.
  3. The author argues that trade uncertainty weighs more heavily on the economy the longer it stays elevated, and that an immediate decline in uncertainty would benefit business planning, employment, and financial markets.

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.
  • Help for the Heartland? The Employment and Electoral Effects of the Trump Tariffs in the United States — The authors find that the combined effect of U.S.-China trade war import tariffs, retaliatory tariffs, and farm subsidies on employment in exposed U.S. locations was at best a wash and possibly mildly negative, while residents of tariff-protected areas became less likely to identify as Democrats and more likely to vote Republican.

AI Summary. Bond traders have paid at least $38m in premiums for options positions that pay off if the 10-year US Treasury yield falls to 4% from roughly 4.3%. Interest-rate swaps price about 60 basis points of Federal Reserve easing across the year's remaining meetings, up from 45 basis points a week earlier.

Edward Bolingbroke Bloomberg
Date Posted:

Traders are betting on 10-year yields falling from 4.3% to 4% in the coming weeks in light of Jerome Powell’s recent statement that cuts would come “sooner rather than later” if inflation remains contained.

Are bond traders betting on lower long-term yields and more rate cuts?

Core argument: Traders paid at least $38 million in premiums across Friday and Monday on August calls on US 10-year Treasury options, positions that hedge against a drop in the 10-year yield to 4% from roughly 4.3%.

Traders are ramping up options wagers that 10-year Treasury yields are poised to sink to the lowest since April. The focus of the bets, which have drawn at least $38 million in premiums across Friday and Monday, has been around August calls on US 10-year options. The positions hedge against a drop in 10-year Treasury yields to 4% in the coming weeks, from roughly 4.3% now. Traders have been building bets on additional rate cuts into the front end of the curve. Swaps are now pricing around four basis points of easing into the July Fed meeting, compared with near zero before Governor Christopher Waller and Vice Chair for Supervision Michelle Bowman spoke, appearing to support an interest-rate cut as early as July, and a combined 60 basis points over the remaining four gatherings this year, up from 45 basis points a week ago.

Takeaways by Macro Roundup® AI

  1. Traders paid at least $38 million in premiums across Friday and Monday on August calls on US 10-year Treasury options, positions that hedge against a drop in the 10-year yield to 4% from roughly 4.3%.
  2. Swaps price about four basis points of easing into the July Fed meeting, up from near zero before Governor Christopher Waller and Vice Chair for Supervision Michelle Bowman appeared to support a rate cut as early as July.
  3. Swaps price a combined 60 basis points of Fed easing over the remaining four meetings this year, up from 45 basis points a week earlier.

Related Articles:

  • Data Update 4 for 2025: Interest Rates, Inflation and Central Banks! — Interest rates are ultimately driven by macroeconomic fundamentals, with an "intrinsic risk-free rate" defined as the sum of the inflation rate and real GDP growth tracking the observed 10-year Treasury bond yield closely. On this view, central banks' influence comes from preferential access to data on those fundamentals, their capacity to alter them, and their credibility.
  • Foreign Treasuries Holdings Held Near a Record in April Turmoil — Foreign holdings of US Treasuries totaled $9.01tn, the second-highest on record and down $36bn from the prior month, with the decline mainly reflecting net sales of US notes and bonds by foreign private investors while official entities were net buyers of longer-term Treasuries. Japan remained the largest foreign holder at $1.13tn.
  • 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.

Thursday, June 26, 2025

AI Summary. Manufacturing employment as a share of total US nonfarm employment has been declining since the end of World War II, a trend the author attributes mainly to rising manufacturing productivity rather than international trade, with declines predating both the North American Free Trade Agreement and China's World Trade Organization entry. Average manufacturing wages have been below average services wages.

Michael Strain Center for Economic and Policy Research
Date Posted:

The manufacturing share of US employment has fallen from its 1944 peak of ~38% to its current level of <10%. Far from implying that “the US doesn’t make things anymore,” this reflects technical progress; manufacturing output is at its historical max.

Is rising productivity, not trade, behind falling manufacturing employment?

Core argument: Manufacturing employment as a share of total nonfarm employment has declined since the end of World War II, driven by rising manufacturing productivity and technological progress rather than international trade, the author argues.

Invoking manufacturing employment declines as a justification for protectionism fundamentally misunderstands the root causes of employment dynamics. Manufacturing employment as a share of total nonfarm employment has been declining since the end of World War II because manufacturing productivity has been increasing over that period. The main driver of manufacturing employment declines has been technological progress, not international trade. Figure 1 clearly illustrates declining manufacturing employment well before China’s accession to the WTO in 2001 or the North American Free Trade Agreement (NAFTA) coming into effect in 1994. If protectionists really wish to boost manufacturing employment, then they should be arguing for reducing manufacturing productivity, not imports. Supporters of protectionism often tout the quality of manufacturing jobs. But the average wage of a manufacturing job has been lower than [that] in a services sector job since 2018. US industrial output reached its post-World War II high in February 2025.

Takeaways by Macro Roundup® AI

  1. Manufacturing employment as a share of total nonfarm employment has declined since the end of World War II, driven by rising manufacturing productivity and technological progress rather than international trade, the author argues.
  2. Manufacturing employment was falling well before China's WTO accession in 2001 or NAFTA's entry into force in 1994.
  3. The average manufacturing wage has been lower than the average services-sector wage since 2018, and US industrial output reached its post-World War II high in February 2025.

Related Articles:

  • Closing the Trade Deficit Would Barely Raise the Share of US Manufacturing Employment — The authors estimate that eliminating the US manufacturing trade deficit by shifting purchases from foreign to domestic goods would raise manufacturing's share of total US employment by just 1.7 percentage points, from 7.9% to 9.7%. Such gains would be far too small to significantly expand labor market opportunities for men without college degrees.
  • Steel Productivity has Plummeted Since Trump’s 2018 Tariffs — Output per hour in the U.S. steel industry has fallen 32% since 2017, following the imposition of 25% tariffs on steel imports, while output per hour for the economy as a whole rose 15%. U.S. steel-using firms, which employ roughly 45x as many Americans as steel producers, pay about 75% more for steel than global competitors.
  • The Mysterious Slowdown in U.S. Manufacturing Productivity — US manufacturing labor productivity growth slowed broadly after the Great Recession, with the four largest firms in each industry averaging –0.5% growth from 2010 to 2022 versus 3.7% from 1987 to 2007, and smaller follower firms showing an identical 4.2 percentage-point decline. The authors find the slowdown spans all industries and firm sizes.

AI Summary. Knowledge-sector workers in data-intensive, repetitive, or research-focused roles—such as medical schedulers, insurance claims processors, and financial advisers—will likely face a job market requiring skill upgrading, transfer to other industries that use their knowledge for related tasks, or acceptance of lower-skilled, lower-paid work. This "up or out" pattern resembles the skills-biased technological change that previously affected middle-skill manufacturing workers.

Brent Orrell American Enterprise Institute
Date Posted:

AI diffusion through “knowledge-based” service sector jobs has increased – and will likely continue to increase – demand for noncognitive “social skills,” with workers who have both cognitive and social skills faring the best.

Will knowledge workers face the same up-or-out pressures as manufacturing workers?

Core argument: Knowledge workers in data-intensive, repetitive, or research-focused roles—including medical schedulers, insurance claims investigators and processors, and financial advisers—will likely face a job market demanding skill upgrading, a move to other sectors, or acceptance of lower-skilled, lower-paid work.

Workers in the knowledge sector whose jobs are data intensive and repetitive or research focused—such as medical schedulers, insurance claims investigators and processors, and financial adviser—will likely face a job market that requires skill upgrading, transferring to other sectors and industries that leverage their knowledge and experience for related tasks, or, in the worst case, accepting lower-skilled (and lower-paid) jobs. This “up or out” feature of the knowledge-workforce future strongly resembles the skills-biased technological change (SBTC) that previously had powerful effects on workers in middle-skill manufacturing jobs.

Takeaways by Macro Roundup® AI

  1. Knowledge workers in data-intensive, repetitive, or research-focused roles—including medical schedulers, insurance claims investigators and processors, and financial advisers—will likely face a job market demanding skill upgrading, a move to other sectors, or acceptance of lower-skilled, lower-paid work.
  2. The "up or out" feature of the knowledge workforce's future resembles the skills-biased technological change that previously had powerful effects on workers in middle-skill manufacturing jobs.

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%.
  • 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.
  • More Than A Quarter of Computer-Programming Jobs Just Vanished. What Happened? — The number of computer programmers in the United States is at its lowest level since 1980, a period in which the total U.S. workforce grew about 75%. Programming jobs, which the government classifies as more routine than software development work, fell 27.5%, while software developer jobs fell 0.3%.

AI Summary. The US Treasury is negotiating with international partners over a global minimum tax on multinational corporations and digital services taxes levied on American technology firms, and says a breakthrough could render a proposed retaliatory tax provision irrelevant. That provision would tax foreign companies and investors from countries deemed to unfairly tax US technology companies.

Daniel Flatley Bloomberg
Date Posted:

Republicans may pull the “Revenge Tax” provision from the reconciliation bill as the Treasury Department nears a deal with OECD partners over global minimum taxes on multinational corporations.

Could an international tax deal make a retaliatory tax provision unnecessary?

Core argument: The "revenge tax" in President Donald Trump's tax legislation would levy foreign companies and investors from countries the US determines have unfairly imposed digital taxes on American technology firms.

The "revenge tax" provision, part of President Donald Trump's signature tax legislation, would impose a levy on foreign companies and investors from countries that the US determines have been unfairly imposing digital taxes on American technology companies.Republicans are weighing whether to pull the revenge tax provision as it nears a deal with European nations and other countries that impose a minimum tax on multinational corporations as part of a global agreement.  That accord may also include the digital services taxes that are imposed on technology firms based in the US by countries such as Canada, the UK, and France. “We continue to have negotiations with our OECD partners and continue to hope that in the very short run we have a breakthrough that would make conversations about 899 irrelevant,” Deputy Treasury Secretary Michael Faulkender said.

Takeaways by Macro Roundup® AI

  1. The "revenge tax" in President Donald Trump's tax legislation would levy foreign companies and investors from countries the US determines have unfairly imposed digital taxes on American technology firms.
  2. Republicans are weighing pulling the revenge tax provision as the US nears a deal with European and other nations that impose a minimum tax on multinational corporations under a global agreement.
  3. Deputy Treasury Secretary Michael Faulkender said negotiations with OECD partners continue and expressed hope for a breakthrough that would make conversations about 899 irrelevant.

Related Articles:

  • 899 — The Three Numbers Alarming the Bond Market — A provision in US legislation would let the Treasury impose a 5% tax surcharge, rising in stages to 20%, on the US investments of countries it identifies as levying "extraterritorial and discriminatory" taxes on American companies, such as the European Union's digital services tax. The chief financial effects would be a weaker dollar and foreign markets outperforming the US.
  • Obscure Tax Item in Trump’s Big Bill Alarms Wall Street — A proposed US tax provision, Section 899, would raise tax rates on individuals and companies from countries whose tax policies the US deems discriminatory, including those imposing digital services taxes on large technology firms. Analysts say the measure, which could raise rates on passive income such as interest and dividends, would further drive away foreign investors.
  • Are Foreigners Selling US Assets? — European and Japanese investors hold roughly 30% and 20% of their fixed income in foreign debt, versus under 10% for US investors, with US bonds making up about 15% of Eurozone and Japanese portfolios. Because foreign investors are less sticky than domestic ones, turmoil in US bond markets has greater potential to unsettle them.

AI Summary. US casualty insurance prices, covering businesses against legal claims from employees, customers, or others harmed by their operations or products, have risen for 23 consecutive quarters, including 8% in one quarter, even as insurers add exclusions and cut payout limits. One leading carrier's chief executive warns coverage could become unavailable at any price.

Lee Harris Financial Times
Date Posted:

The cost of casualty insurance rose 8% in Q1 2025; costs have risen for 23 successive quarters. Carriers are considering withdrawing from the liability market due to “runaway jury verdicts” & increasing lawsuits driven by the litigation funding industry.

Are rising legal claims pushing business liability coverage out of reach?

Core argument: US casualty insurance prices rose 8% in the first quarter and have climbed for 23 consecutive quarters, according to Marsh, the world's largest insurance broker.

The cost of US casualty insurance, which businesses buy to protect themselves against legal claims from employees, customers or others harmed by their operations or products, has climbed for 23 quarters in a row, according to the world’s largest insurance broker Marsh. Prices for the insurance segment rose 8% in the first quarter of this year, despite insurers carving out new exclusions and lowering the total they promise to pay out for any claim. That could soon mean insurers withdraw from the market altogether, the chief executive of one leading insurance carrier said. “It won’t be a question of how much you’re willing to pay — the cover won’t be available,” Everest chief executive Jim Williamson said at the Financial Times’ insurance summit last week. “No one will offer it at any price. That’s when you start to see a real breakdown.”

Takeaways by Macro Roundup® AI

  1. US casualty insurance prices rose 8% in the first quarter and have climbed for 23 consecutive quarters, according to Marsh, the world's largest insurance broker.
  2. Insurers have carved out new exclusions and lowered the totals they promise to pay for any claim, even as US casualty coverage prices continued to rise.
  3. Everest chief executive Jim Williamson said insurers could withdraw from the casualty market altogether, leaving cover unavailable at any price: "That's when you start to see a real breakdown.".

Related Articles:

  • The World Is Getting Riskier. Americans Don’t Want to Pay for It — Americans' resistance to paying to insure against risks from illness, old age, and natural and financial disasters is growing alongside those risks; JPMorgan estimated wildfires around Los Angeles caused $50bn in losses, of which only $20bn were insured. Socializing risk removes the price signal that encourages the insured to mitigate their own exposure.
  • Reinsurers Little Exposed to LA Fires After Retreat From Disaster Risks — Citi analysts estimate reinsurers could absorb less than 3% of insured losses from the Los Angeles wildfires. Reinsurers' share of modelled catastrophe risk has fallen from about 46% over the past 25 years to 33%, following years of wildfire losses that led major reinsurers to reduce their appetite for such risks.
  • Growing Costs of Natural Disasters are Stressing Property Insurance Markets — U.S. home insurers posted $15.2bn in net underwriting losses, their worst performance since at least 2000, and are responding by raising premiums and withdrawing coverage. State "last-resort" public insurance plans, backed by a state's policyholders or taxpayers, reached a record of just over $1.3tn in exposure, signaling growing unavailability of private coverage.

AI Summary. An analysis of New York City's mayoral vote finds that Mamdani's coalition centered on working-, middle-, and upper-middle-class renters across white, Hispanic and Asian neighborhoods and on the youngest voters, while Cuomo's support came from both the wealthy and the poor and from middle-class Black voters in an older Black electorate.

Michael Lange New York Times
Date Posted:

Michael Lange argues Mamdani’s winning coalition was one of the “in-between,” made up of working, middle, and upper-middle-class renters spanning white, Hispanic, and Asian neighborhoods. Cuomo slimly prevailed among the rich and the poor.

How did class and age divide voters in the mayoral race?

Core argument: Zohran Mamdani trailed Andrew Cuomo by only 9 points in Staten Island, performing best along the racially mixed North Shore and in union-dense, home-owning precincts.

Mr. Cuomo’s core coalition bookended the ends of the economic spectrum (the wealthy and the poor), Mr. Mamdani’s coalition was the in-between (working-, middle-, and upper-middle-class renters spanning white, Hispanic and Asian neighborhoods). The city’s youngest generations gave Mr. Mamdani his shocking success Tuesday night. Mr. Cuomo performed well with middle-class Black voters, but that was at least in part because the Black electorate in New York is older than the Hispanic and Asian electorates. With almost every other group, Mr. Mamdani’s performance across the city was a profound improvement on that of Bernie Sanders and other progressive and socialist candidates. He won a plurality of the Hispanic vote, in addition to sweeping many “Gentrifying Battlegrounds” in Central Brooklyn and Upper Manhattan, and only trailed Mr. Cuomo by 9 points in Staten Island, performing best along the racially mixed North Shore and in union-dense, home-owning precincts. Furthermore, Mr. Mamdani made pronounced inroads with Asian voters, particularly in Queens, performing well in immigrant-heavy enclaves that shifted toward Mr. Trump in November.

Takeaways by Macro Roundup® AI

  1. Zohran Mamdani trailed Andrew Cuomo by only 9 points in Staten Island, performing best along the racially mixed North Shore and in union-dense, home-owning precincts.
  2. Mamdani's coalition consisted of working-, middle-, and upper-middle-class renters across white, Hispanic and Asian neighborhoods, while Cuomo's core support bookended the economic spectrum among the wealthy and the poor.
  3. Mamdani won a plurality of the Hispanic vote, swept many "Gentrifying Battlegrounds" in Central Brooklyn and Upper Manhattan, and made inroads with Asian voters in immigrant-heavy Queens enclaves that shifted toward Donald Trump in November.

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AI Summary. Housing units rose 17% in the Austin metropolitan area between 2020 and 2024 versus 3% in New York City, and New York housing prices and rents have risen more than Austin's despite far weaker job growth. Rent regulation covering roughly half of New York's units discourages tenants from moving and landlords from upgrading.

Greg Ip Wall Street Journal
Date Posted:

Since 2020, Austin’s payroll employment and housing prices rose 20% and 44%, respectively, compared with 3% and 48% in NYC. The number of housing units rose 17% in Austin, but just 3% in NYC.

Does restricting new housing supply raise prices and rents?

Core argument: Housing units rose 17% in Austin between 2020 and 2024 versus 3% in New York City, according to census data, while Austin's payroll employment grew 20% since February 2020 against New York's 3%.

Since February 2020, payroll employment is up a whopping 20% in the Austin metropolitan area, versus just 3% in New York City. Yet since then, housing prices have actually risen more in New York, by 48%, than in Austin, by 44%. Austin’s rents at one point were rising 23% a year but have since plummeted and now stand just 11% higher than in early 2020, according to RealPage, which serves the apartment industry, while New York’s are 20% higher. The reason, as you might have guessed, is supply. Between 2020 and 2024, total housing units rose 17% in Austin, but just 3% in New York, according to census data. Rent control or rent “stabilization,” now covering roughly half the city’s units, discourages tenants from moving and landlords from upgrading the quality of units.

Takeaways by Macro Roundup® AI

  1. Housing units rose 17% in Austin between 2020 and 2024 versus 3% in New York City, according to census data, while Austin's payroll employment grew 20% since February 2020 against New York's 3%.
  2. New York City housing prices have risen 48% since February 2020, more than Austin's 44%, despite Austin's faster job growth.
  3. Austin rents, which at one point rose 23% a year, now stand 11% above early 2020 levels versus 20% in New York, according to RealPage; rent control or "stabilization" covers roughly half of New York's units, discouraging tenants from moving and landlords from upgrading.

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  • America’s Housing Supply Problem: The Closing of the Suburban Frontier? — Quality-adjusted real house prices are historically high in many major US markets, especially in the Sunbelt, while homebuilding has fallen sharply, particularly in higher-price, lower-density areas. The authors find high suburban prices in Sunbelt metros no longer stimulate much new construction, possibly because residents have made new projects difficult to permit.
  • America’s Housing Affordability Crisis and the Decline of Housing Supply — Housing production intensity has fallen substantially, especially in fast-growing Sunbelt markets once known for building, converging toward the low rates long seen on the coasts and in declining industrial centers. The authors argue incumbent-controlled regulation explains the weakening link between high prices, high demand areas, and new construction.
  • The Price of Housing in the United States — Real housing price appreciation in the United States has varied widely across regions, with West Coast cities rising earlier while prices in other regions remained comparable in real terms to decades earlier. The authors find essentially no relationship between real price growth and zoning restrictiveness in the earliest period studied, and progressively steeper gradients in later periods.