Edward Conard

Top Ten New York Times Bestselling Author

  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “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
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…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
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
  • “…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
  • “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
  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Wednesday, September 3, 2025

AI Summary. Among the largest US industrial firms, those founded between 1880 and 1920 remain the most represented, while top retailers and wholesalers have averaged 60–70 years old and large services firms cluster around founding dates of 1960–1980. The authors model such a "special generation" as arising from adopting a scalable technology plus learning-by-doing.

Yueran Ma, Benjamin Pugsley, Haomin Qin and Kaspar Zimmermann National Bureau of Economic Research
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An outsized share of the top manufacturing firms in the Fortune 1000 as of 2018 originated circa 1900, apparently the persistent echo of an “industrial revolution,” while the less technology-based retail and wholesale sectors lack a “special generation.”

Why do the largest industrial firms share a common founding era?

Core argument: Among 2018 Fortune 1,000 industrials, firms founded between 1880 and 1920 are the most represented cohort, and top manufacturing firms in the 1910s, 1950s, and 2010s alike predominantly date back to around 1900.

In manufacturing, top firms in the 1910s, 1950s, and 2010s predominantly date back to around 1900, [though] even as this special generation persists, turnover among [these] top firms has been substantial. In Figure 1, we plot the number of 2018 Fortune 1,000 companies that originated in each decade, based on the firm’s industry in 2018. For industrials, we observe that the cohort from 1880 to 1920 is most represented among today’s largest industrials. In contrast the largest retailers and wholesalers have always stayed 60 to 70 years old on average, without a special generation. Today, birth years of services companies cluster around 1960 to 1980; few large ones existed before, and few services companies would qualify for the largest businesses in the economy until recently. In a model of firm dynamics a special generation can arise from an industrial revolution, through the adoption of a scalable technology and learning-by-doing; lasting nonstationarity among the dynamics of top firms can result from the long echoes of technological change. [For] retailers and wholesalers, learning appears absent, so a special generation would be harder to sustain.

Takeaways by Macro Roundup® AI

  1. Among 2018 Fortune 1,000 industrials, firms founded between 1880 and 1920 are the most represented cohort, and top manufacturing firms in the 1910s, 1950s, and 2010s alike predominantly date back to around 1900.
  2. The largest retailers and wholesalers have always averaged 60 to 70 years old with no special founding generation, while large services companies cluster in birth years from 1960 to 1980.
  3. In a model of firm dynamics, a special generation can arise from an industrial revolution through adoption of a scalable technology and learning-by-doing, with learning appearing absent among retailers and wholesalers.

Related Articles:

  • Which U.S. Stocks Generated the Highest Long-Term Returns? — Of the 29,078 U.S. common stocks in a database spanning nearly a century, 51.6% had negative cumulative returns, while 17 stocks returned more than 5m% — led by Altria at 265m%. Those top performers averaged annualized returns of just 13.47%, underscoring the value of time invested.
  • Long-Term Shareholder Returns: Evidence From 64,000 Global Stocks — A study of about 64,000 global stocks estimates net global stock market wealth creation of $75.7tn, with returns highly concentrated: the top 159 firms (0.25%) account for half of net wealth creation and the top 1,526 (2.39%) account for all of it. Fewer than half of stocks beat one-month US Treasury bills, 42.6% of non-US and 44.8% of US stocks.
  • The Long Goodbye? Incumbent Competitiveness in the 21st Century — Value creation among large American companies has become concentrated in a newer cohort of firms: businesses founded after World War II accounted for 8% of the top 50 companies' total market value in 1990 but 77% by 2024. The leading 20th-century incumbents are fading as this newer group takes over.

AI Summary. Weaker-than-expected US job openings data prompted bets on more aggressive Federal Reserve rate cuts, driving a global bond rally that halted a sell-off which had lifted borrowing costs in several major economies to multi-year highs. The 30-year US Treasury yield fell 0.07 percentage points to 4.9%.

Ian Smith, Leo Lewis and Arjun Neil Alim Financial Times
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Amid a global sell-off of long bonds, the 30-year Treasury yield hit 5% until disappointing data on US job openings caused it to retreat to 4.9%, and Japan’s 30-year yield briefly hit a record high.

Does weak US labor data spur a global bond rally?

Core argument: The 30-year US Treasury yield fell 0.07 percentage points to 4.9%, after climbing to 5% for the first time since July, as disappointing US job openings data spurred bets on more aggressive Federal Reserve rate cuts.

Bond markets rallied on Wednesday, recovering from a global sell-off, as disappointing data on US job openings prompted bets that the Federal Reserve would cut rates more aggressively to support the world’s biggest economy. The rally halted a bond market slide that had pushed borrowing costs in some big economies to their highest levels in years. The yield on the 30-year US Treasury fell 0.07 percentage points to 4.9%, recovering after climbing to 5% for the first time since July. Bond yields move inversely to prices. The moves powered a recovery in sentiment towards sovereign bonds around the world, after Japan’s 30-year yield earlier hit a record high and the UK’s 30-year gilt yield reached a fresh post-1998 high at 5.75%. The 30-year gilt yield fell back to 5.62%.

Takeaways by Macro Roundup® AI

  1. The 30-year US Treasury yield fell 0.07 percentage points to 4.9%, after climbing to 5% for the first time since July, as disappointing US job openings data spurred bets on more aggressive Federal Reserve rate cuts.
  2. The UK's 30-year gilt yield retreated to 5.62% after reaching a fresh post-1998 high of 5.75%, while Japan's 30-year yield had earlier hit a record high.
  3. The bond rally halted a global slide that had pushed borrowing costs in some big economies to their highest levels in years.

Related Articles:

  • Why Is The Yield Curve Steepening? Because Of Coming Fed Cuts And Fiscal Challenges — The US yield curve is steepening across both the 2-to-10-year and 10-to-30-year segments. The article attributes this to Federal Reserve rate cuts, the risk that markets read those cuts as politically motivated and raise inflation expectations and long-term rates, and growing Treasury debt issuance pushing long rates up.
  • The Race Between Asset Supply and Asset Demand — The authors estimate that demand for assets has outpaced supply by roughly 400% of GDP versus 100%, making rising asset demand the leading contributor to falling interest rates. They project that debt sustainability requires fiscal consolidation exceeding 10% of GDP, though debt could reach 250% of GDP without raising interest rates.
  • 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.

AI Summary. The authors estimate US tariffs raised $146bn in net customs duty revenues over the first eight months of 2025, with roughly $88bn of that attributable to new 2025 tariffs. August's new-tariff revenue of about $23bn ran roughly a fifth below the $29bn per month projected from statutory rates.

Ernie Tedeschi Yale University
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Ernie Tedeschi estimates tariffs have raised ~$88B in new revenue since January, with the new tariffs raising ~$23B in revenue in August alone. The actual average effective tariff was likely ~11.5% in August relative to 2.4% at the start of the year.

How much revenue have new tariffs actually collected so far?

Core argument: The US collected an estimated $146 billion in total net customs duty revenues in calendar 2025 through August, of which roughly $88 billion came from the new 2025 tariffs.

[We] estimate that the US has raised $146 billion in total net customs duty revenues in calendar year 2025 so far through August. This total stems from all US tariffs, not just those adjusted in 2025. Before the 2025 tariff announcements, the average effective US tariff rate was 2.4% which raised about $7 billion a month in net customs duty revenues. The new 2025 tariffs have raised roughly $88 billion in revenues so far, with about $23 billion of that new tariff revenue posted in August alone when the average effective tariff rate was likely 11-12%, up from 10% in June and July. This comes to roughly 0.8% of GDP each month, a meaningful amount of deficit reduction. The new tariffs are raising a bit less revenue than would be expected given where policy has been set. One way of illustrating is comparing actual to expected revenues. TBL projects that new 2025 tariff policy as of August 6 would be expected to raise an additional $29 billion per month in net tariff revenues, but as mentioned above, actual revenues in August will likely be $23 billion higher, about a fifth less than we would project given current statutory tariff rates.

Takeaways by Macro Roundup® AI

  1. The US collected an estimated $146 billion in total net customs duty revenues in calendar 2025 through August, of which roughly $88 billion came from the new 2025 tariffs.
  2. About $23 billion of new tariff revenue posted in August alone, when the average effective US tariff rate was likely 11–12%, up from 10% in June and July and 2.4% before the 2025 tariff announcements.
  3. Actual August tariff revenue of roughly $23 billion came in about a fifth below the $29 billion per month that TBL projects from statutory tariff rates as of August 6.

Related Articles:

  • Tariffs Are Generating Meaningful New Revenue — New U.S. tariffs are estimated to generate $1.3tn in net new revenue through the end of the current presidential term and $2.8tn through 2034 before economic effects, about $600bn more than previously enacted tariffs. If a court ruling striking down some tariffs is upheld, the remainder could raise as little as $800bn through 2034.
  • Trump Signals Imminent Supreme Court Appeal to Protect Tariffs — The U.S. Court of Appeals for the Federal Circuit ruled 7-4 that the International Emergency Economic Powers Act — a statute that primarily authorizes sanctions and does not mention tariffs — was unlikely to have been intended by Congress to grant the president nearly unlimited tariff authority. The White House is preparing a Supreme Court appeal.
  • 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. Technology-sector capital spending has accounted for 35%–45% of US GDP growth over three quarters, implying that without it growth would be near 1% given weak consumption. Among S&P 500 companies, capital spending rose 24% and research and development 10%, but the median stock grew both by only 3%–4%.

Michael Cembalest J.P. Morgan
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Capital spending by the tech sector drove 35–45% of US GDP growth over the past three quarters. Without this capex, Mike Cembalest notes, “US growth might already have converged to ~1% due to weakness in consumption.”

Is US growth dependent on tech capital spending?

Core argument: Tech sector capital spending has contributed 35%–45% of overall US GDP growth over the last three quarters, and without it US growth might already have converged to ~1% given weakness in consumption.

Tech sector capital spending has been contributing 35%-45% of overall US GDP growth over the last three quarters. This is remarkable; in other words, without tech capital spending, US growth might already have converged to ~1% due to weakness in consumption. Some GDP growth impacts are exaggerated since tech equipment is partially imported from Taiwan, but the general trend is the same: tech capital spending is an increasingly important contributor to both growth and equity valuations. Investment spending growth for the S&P 500 looked good in Q2 at 24% for capex and another 10% for R&D; but for the median stock, both grew by just 3%-4%.

Takeaways by Macro Roundup® AI

  1. Tech sector capital spending has contributed 35%–45% of overall US GDP growth over the last three quarters, and without it US growth might already have converged to ~1% given weakness in consumption.
  2. S&P 500 investment spending grew 24% for capex and 10% for R&D in the second quarter, but for the median stock both grew by just 3%–4%.
  3. Some GDP growth impacts of tech capital spending are exaggerated because tech equipment is partially imported from Taiwan, though tech capital spending remains an increasingly important contributor to both growth and equity valuations.

Related Articles:

  • How America’s AI Boom Is Squeezing The Rest Of The Economy — About a sixth of America's 2% real GDP growth over the past year came from investment in computer and communications equipment and data centres, and one estimate puts the artificial intelligence boom's total contribution to growth at 40%. Average electricity bills rose 7%, attributed in part to data-centre demand, while housebuilding and non-AI business investment slumped and real consumption flatlined.
  • 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.
  • Honey, AI Capex is Eating the Economy — Capital spending on AI data centers is around 20% of railroads' peak spending as a share of GDP and is rising quickly, having already surpassed the dot-com era peak in telecom investment. Unlike long-lived rail infrastructure, data centers are short-lived assets requiring frequent hardware replacement, and the capital is being reallocated from other sectors.

AI Summary. Employment for workers aged 22-25 and 26-30 has declined relative to its pre-ChatGPT trend and relative to older workers in the same occupation, but the age groups shown are not equally sized. The authors argue that combining all age groups shows software developer jobs have continued to grow overall.

David Deming Forked Lightning
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Deming argues that the drop in headcount of software developers aged 22–25 may merely be a reflection of the experience of a particular cohort constituting only 4 years of observations, not the “canary in the coal mine” suggested by Brynjofsson et al.

Are software developer jobs still growing despite declines among young workers?

Core argument: Employment for workers aged 22–25 and 26–30 has fallen relative to its pre-ChatGPT trend and relative to older workers in the same occupation, according to the headline finding the authors cite.

The authors emphasize the headline finding, which is that employment for young workers (age 22-25 in blue, and age 26-30 in orange) has decreased relative to its pre-ChatGPT trend and also relative to older workers in the same occupation. While the figure above shows that young workers are suffering more, it’s a little misleading. Those lines each represent a group of workers, but they are NOT the same size. Your eyes are drawn to the blue line, but it only has 4 years in it. The top line (in purple) has 9 years in it (ages 41-49). If age were uniformly distributed, those two lines would roughly cancel out when weighted by size. If you smashed all the lines together, you’d see that software developer jobs have continued to grow overall through the release of ChatGPT.

Takeaways by Macro Roundup® AI

  1. Employment for workers aged 22–25 and 26–30 has fallen relative to its pre-ChatGPT trend and relative to older workers in the same occupation, according to the headline finding the authors cite.
  2. The authors argue the age-group chart misleads because the bands differ in size, with the 22–25 group spanning 4 years and the 41–49 group spanning 9, so under a uniform age distribution the two lines would roughly cancel when weighted by size.
  3. Aggregating all age groups, software developer employment has continued to grow overall through the release of ChatGPT.

Related Articles:

  • Canaries in the Coal Mine? Six Facts about the Recent Employment Effects of Artificial Intelligence — Using payroll records covering millions of US workers, the authors find employment for workers aged 22–25 in occupations most exposed to artificial intelligence, such as software developers and customer service representatives, declined 6%, while employment for older workers in those occupations rose 6–9%. Employment in less-exposed occupations grew comparably across age groups.
  • AI and Jobs: The Final Word (Until the Next One) — Unemployment has risen by 0.30 percentage points for the fifth of workers most exposed to artificial intelligence, compared with 0.94 percentage points for the least exposed fifth, leaving no visible AI effect on jobs. The share of workers leaving the labor force within a year is lowest among the most AI-exposed workers and roughly flat.
  • Technological Disruption in the US Labor Market — The authors present four signs that US labor market change has accelerated, possibly from technology: polarization has ended as low- and middle-paid employment declined while highly paid work grew, low-paid service job growth stalled, the STEM employment share rose over 50%, and retail sales employment fell 25%. They argue artificial intelligence's effects will unfold over decades.

AI Summary. General Social Survey data show the share of US adults ages 18–64 reporting weekly sex fell from 55% in 1990 to 37% by 2024. The decline extends to married adults across age groups, whose weekly rate fell from 59% to 49%.

Grant Bailey and Brad Wilcox Institute for Family Studies
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According to the General Social Survey, the share of Americans (18–64) reporting they had sex weekly dropped from 55% in 1990 to 37% in 2024. 24% of young adults 18–29 report not having sex within the last year.

Is the share of Americans having weekly sex declining?

Core argument: The share of U.S. adults ages 18–64 reporting weekly sex fell from 55% in 1990 to under 50% by 2010 and 37% in 2024, according to the General Social Survey.

Americans are having a record low amount of sex. We find that in 1990, 55% of adults ages 18–64 reported having sex weekly, according to the General Social Survey (GSS). But around the turn of the millennium, that number began to dip: by 2010, less than half reported having sex weekly, and by 2024, of the more than 1,000 men and women queried on this topic by the GSS, that number had fallen to just 37%. Notably, the sex recession is making inroads among married couples. Between 1996 and 2008, 59% of married adults, ages 18-64, reported having sex once a week or more. That number fell to 49% for the period of 2010 to 2024. Married couples are seeing declines in sexual frequency across age groups.

Takeaways by Macro Roundup® AI

  1. The share of U.S. adults ages 18–64 reporting weekly sex fell from 55% in 1990 to under 50% by 2010 and 37% in 2024, according to the General Social Survey.
  2. Among married adults ages 18–64, 59% reported sex at least weekly over 1996–2008, falling to 49% over 2010–2024, with declines in sexual frequency across age groups.
  3. The General Social Survey's 2024 figure of 37% reporting weekly sex draws on more than 1,000 men and women queried on the topic.

Related Articles:

  • US College Students’ Well-Being — A study of US college students finds moderate-to-severe depression reported by 26% of students at one elite institution, 22% reporting moderate-to-severe anxiety and 10% contemplating suicide. Poorer mental health is associated with being female, little exercise, low grades, and financial aid; financial stress is associated with higher suicidal thoughts.
  • Disconnected: The Growing Class Divide in American Civic Life — 17% of Americans report having no close friends, and survey data show a wide educational gap: 24% of those with a high school education or less have no close friends versus 10% of college graduates. Three decades ago, Americans with less formal education reported social circles at least as large.
  • Declining Life Satisfaction and Happiness Among Young Adults in Six English-speaking Countries — Eleven studies find declines in life satisfaction and happiness among young adults in the US, Australia, Canada, Ireland, New Zealand, and the UK. In these countries life satisfaction now rises with age across the lifespan, as young people's life satisfaction dropped sharply while that of people 45 and over stayed flat.

Thursday, September 4, 2025

AI Summary. Industries more exposed to trade policy uncertainty are estimated to have cut imports of intermediate goods and increased automation, along with higher productivity partly reflecting that automation. The estimated relationship between industry employment and trade policy uncertainty exposure is close to zero.

Hamid Firooz, Sylvain Leduc, and Zheng Liu Federal Reserve Bank of San Francisco
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Between 2004 and 2022, US industries dependent on foreign inputs responded to increases in a news-based measure of Trade Policy Uncertainty (TPU) by increasing automation, leading to a rise in labor productivity with no net effect on employment.

Does trade policy uncertainty push exposed industries toward automation?

Core argument: Industries more exposed to trade policy uncertainty showed greater reductions in imported intermediate goods and larger increases in automation following heightened uncertainty, in industry-level data running through 2022 that excludes the most recent surges.

Figure 4 reports the estimated relationships of an industry’s robot density, imports of intermediate goods, productivity, and employment with the industry’s relative exposure to TPU. [The TPU index is based on the frequency of articles in major U.S. newspapers that discuss economic policy uncertainty and mention trade policy. “Relative” means that TPU is interacted with] the industry’s initial exposure to trade measured by the share of imported intermediate goods in gross output at the start of our sample in 2004. Our industry-level data are available through 2022, [so the sample doesn't include] the most recent surges in TPU. Following heightened TPU, industries that are more exposed to TPU experienced greater reductions in imported intermediate goods and larger increases in automation. Those industries also experienced a boost in productivity, partly reflecting the rise in automation. However, the estimated relationship between an industry’s employment and its exposure to TPU is close to zero, suggesting that the employment effects of TPU for firms in exposed industries are not much different from less-exposed [ones], likely because automation leads to the elimination of some jobs and the creation of others.

Takeaways by Macro Roundup® AI

  1. Industries more exposed to trade policy uncertainty showed greater reductions in imported intermediate goods and larger increases in automation following heightened uncertainty, in industry-level data running through 2022 that excludes the most recent surges.
  2. Industries more exposed to trade policy uncertainty also saw a boost in productivity, partly reflecting the rise in automation.
  3. The estimated relationship between an industry's employment and its exposure to trade policy uncertainty is close to zero, likely because automation eliminates some jobs while creating others.

Related Articles:

  • What Would It Take to Bring Back US Manufacturing? Part 1: America’s Structural Headwinds — The US imports roughly 40% of the goods it consumes, directly and through imported inputs, with labor-intensive goods like apparel almost entirely imported. The authors argue America's main comparative disadvantage is its cost of production, driven mainly by labor costs, with real estate costs and a strong dollar also contributing.
  • America Is Missing The New Labor Economy – Robotics Part 1 — Building an identical robotic arm in the US costs about 2.2x more than in China, and US-labeled components still depend heavily on Chinese parts and materials with no scalable alternative. The author argues China is the only country positioned to capture full-scale intelligent robotic automation, which would let it outcompete the US across production.
  • How AI & Robots are Smashing Economics, and Why It Matters — As artificial intelligence and robots make wages less responsive to employment conditions, the link between tight labor markets and inflation weakens, undermining central banks' inflation-targeting frameworks. The author argues central banks would then need far larger interest-rate moves to achieve the same effect, producing more volatile and less predictable outcomes.

AI Summary. One-month implied volatility for US Treasuries rose 12.12 points over three days on an Intercontinental Exchange gauge, the largest such rolling increase since the announcement of reciprocal tariffs. US spending and tax cut plans are projected to worsen the country's finances unless tariff revenues are sustained.

Masaki Kondo Bloomberg
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The one-month implied volatility for Treasuries jumped 12.12pp over the past 72 hours, the most on a rolling basis since “Liberation Day.”

Are fiscal concerns driving a sharp jump in Treasury volatility?

Core argument: One-month implied volatility for Treasuries rose 12.12 points over three days on an Intercontinental Exchange Inc. gauge, the largest rolling increase since the period following "Liberation Day" on April 2.

One-month implied volatility for Treasuries jumped 12.12 points over the last three days, according to a gauge from Intercontinental Exchange Inc. That’s the most on a rolling basis since the same period following “Liberation Day” on April 2, when President Donald Trump announced reciprocal tariffs. The Trump administration’s spending and tax cut plans are projected to worsen the country’s finances, unless revenues from tariffs are sustained.

Takeaways by Macro Roundup® AI

  1. One-month implied volatility for Treasuries rose 12.12 points over three days on an Intercontinental Exchange Inc. gauge, the largest rolling increase since the period following "Liberation Day" on April 2.
  2. President Donald Trump announced reciprocal tariffs on April 2, and the period that followed produced the prior comparable jump in Treasury implied volatility.
  3. The Trump administration's spending and tax cut plans are projected to worsen U.S. finances unless tariff revenues are sustained.

Related Articles:

  • Trump Signals Imminent Supreme Court Appeal to Protect Tariffs — The U.S. Court of Appeals for the Federal Circuit ruled 7-4 that the International Emergency Economic Powers Act — a statute that primarily authorizes sanctions and does not mention tariffs — was unlikely to have been intended by Congress to grant the president nearly unlimited tariff authority. The White House is preparing a Supreme Court appeal.
  • Tariffs Are Generating Meaningful New Revenue — New U.S. tariffs are estimated to generate $1.3tn in net new revenue through the end of the current presidential term and $2.8tn through 2034 before economic effects, about $600bn more than previously enacted tariffs. If a court ruling striking down some tariffs is upheld, the remainder could raise as little as $800bn through 2034.
  • 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.

AI Summary. A French government confidence vote is expected to be lost, with the likely outcome a newly appointed government, though fresh elections remain possible. The authors project slower fiscal adjustment, with the deficit easing from 5.4% to 5.2% in 2026, adding to debt and raising the risk of credit rating changes.

Sven Stehn Goldman Sachs
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Goldman believes it is likely the French government will lose next week’s confidence vote, slowing fiscal consolidation. They foresee the French “deficit edging down from 5.4% this year to 5.2% of GDP in 2026.”

Will political instability slow French deficit reduction and pressure credit ratings?

Core argument: France's fiscal deficit is now expected to edge down only from 5.4% this year to 5.2% in 2026, which further pushes up debt and raises the risk of credit rating adjustments.

French Prime Minister Bayrou’s unexpected call for a confidence vote on September 8 has reintensified political risks in France. Given commentary by the opposition parties, the government is very likely to lose the vote. In this case, we expect President Macron to appoint a new government but new elections before year-end are also possible. Fiscal adjustment is now likely to be even slower—with the deficit edging down from 5.4% this year to 5.2% in 2026—which further pushes up debt and raises the risk of credit rating adjustments. That said, we left our French growth forecast unchanged—as a bigger deficit mitigates slightly tighter financial conditions—and see a more balanced medium-term outlook for France.

Takeaways by Macro Roundup® AI

  1. France's fiscal deficit is now expected to edge down only from 5.4% this year to 5.2% in 2026, which further pushes up debt and raises the risk of credit rating adjustments.
  2. French Prime Minister Bayrou's call for a September 8 confidence vote is very likely to end in defeat given opposition party commentary, after which President Macron is expected to appoint a new government, though new elections before year-end are also possible.
  3. The French growth forecast is left unchanged, as a bigger deficit mitigates slightly tighter financial conditions, with a more balanced medium-term outlook for France.

Related Articles:

  • Back to the Barricades, and the Bond Spreads — The gap between French and German 10-year government bond yields is near the highs reached during France's political crises, and French stocks have resumed sharp underperformance versus the rest of Europe. France's finance minister warned the country might need assistance from the International Monetary Fund.
  • France Is A Symptom of ECB Yield Caps — In the euro zone, high-debt countries run larger budget deficits than low-debt ones. The author argues that European Central Bank backstops eliminate the risk of a debt crisis and therefore any political incentive to pursue unpopular spending cuts or tax increases, with France's fiscal standoff a symptom.
  • The Future of European Competitiveness – A Competitiveness Strategy for Europe — A European Union competitiveness report attributes the EU's labour productivity growth gap with the US largely to weaker activity in information and communications technology and large-scale digital services; excluding main ICT sectors, EU productivity was broadly at par with the US from 2000-2019. It estimates Europe's investment share must rise about 5 percentage points of GDP.

AI Summary. Japan and Germany both have 30-year government bond yields near 3.3% despite gross government debt of 240% of GDP versus just above 60%, a gap attributed to the Bank of Japan's large-scale bond purchases. As the Bank of Japan steps back from capping long-term yields, Japan's 30-year yield is likely to rise further.

Robin Brooks Robin Brooks Substack
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Brooks argues that upward pressure on global long bond yields is due to budget deficits and the fading of QE. Noting QE’s strong downward pressure on Japanese yields, he argues “there’s still lots of room for yields to rise from artificially low levels.”

Do central bank bond purchases explain why high debt brings low yields?

Core argument: Japan and Germany both carry 30-year government bond yields near 3.3% despite gross government debt of 240% of GDP in Japan last year versus just above 60% in Germany.

The chart illustrates just how important the [fading of the cumulative effect of QE] is. The chart shows 30-year government bond yields on the vertical axis and gross government debt in percent of GDP on the horizontal axis. I’ve highlighted the Euro zone countries in red, the rest of the G10 in blue, and Japan and Germany in black. Japan and Germany have special significance in this chart because they both have 30-year government bond yields around 3.3%, but debt levels are wildly different. Japan had gross government debt of 240% of GDP last year, while Germany stood just above 60%. The fact that Japan doesn’t have a higher yield is entirely due to huge QE purchases by its central bank. As the Bank of Japan increasingly steps back from capping longer-term yields, Japan’s 30-year yield is likely to rise a lot further.

Takeaways by Macro Roundup® AI

  1. Japan and Germany both carry 30-year government bond yields near 3.3% despite gross government debt of 240% of GDP in Japan last year versus just above 60% in Germany.
  2. The author attributes Japan's lack of a higher yield than Germany, despite far larger debt, entirely to huge QE purchases by the Bank of Japan.
  3. As the Bank of Japan steps back from capping longer-term yields, the author expects Japan's 30-year yield to rise a lot further.

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  • The Race Between Asset Supply and Asset Demand — The authors estimate that demand for assets has outpaced supply by roughly 400% of GDP versus 100%, making rising asset demand the leading contributor to falling interest rates. They project that debt sustainability requires fiscal consolidation exceeding 10% of GDP, though debt could reach 250% of GDP without raising interest rates.
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AI Summary. The US had 1,135 billionaires worth about $5.7tn, up from 927 four years earlier, with the 100 richest holding nearly $3.86tn, according to wealth-intelligence firm Altrata. Roughly 300 made their fortunes in banking and finance versus about 110 in technology, and a third inherited much or all of their wealth.

Inti Pacheco and Theo Francis Wall Street Journal
Date Posted:

According to a WSJ analysis, there were 1,135 billionaires in the US in 2024, worth a collective $5.7T. ~⅓ of American billionaires inherited much or all of their wealth.

How many US billionaires are there, and where did their wealth originate?

Core argument: The U.S. had 1,135 billionaires as of 2024, up from 927 in 2020, collectively worth about $5.7 trillion, according to wealth-intelligence firm Altrata.

There were 1,135 billionaires in the U.S. as of 2024—up from 927 in 2020, according to data from Altrata, a wealth-intelligence firm. Collectively, these people are worth about $5.7 trillion. The 100 richest billionaires account for nearly $3.86 trillion in wealth—more than half the total. Just three men—Elon Musk, Bezos and Mark Zuckerberg—account for almost $1 trillion of it. Despite those outsize Silicon Valley fortunes, most U.S.-based billionaires didn’t make their wealth in tech. About 300 came from banking and finance, compared with roughly 110 from the tech sector. Another 75 came from real estate. A third of billionaires inherited much or all of their wealth, Altrata said. There is just one Rockefeller on the list, but 50 billionaire heirs of five companies hold roughly $830 billion total. These individuals account for nearly 15% of all the billionaires’ wealth.

Takeaways by Macro Roundup® AI

  1. The U.S. had 1,135 billionaires as of 2024, up from 927 in 2020, collectively worth about $5.7 trillion, according to wealth-intelligence firm Altrata.
  2. The 100 richest U.S. billionaires hold nearly $3.86 trillion, more than half the total, with Elon Musk, Jeff Bezos and Mark Zuckerberg alone accounting for almost $1 trillion.
  3. About 300 U.S. billionaires made their fortunes in banking and finance, compared with roughly 110 in tech and 75 in real estate, and Altrata says a third inherited much or all of their wealth.

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AI Summary. China has ordered its solar industry to curb overcapacity and price-cutting as six of its largest cell and panel makers reported combined first-half losses that doubled from a year earlier to Rmb20.2bn ($2.8bn), following record profits earlier. China controls about 90% of global solar cell manufacturing capacity, and its output exceeds combined domestic and overseas demand.

Edward White, Wang Xueqiao, and Cheng Leng Financial Times
Date Posted:

In the face of widening losses, China has ordered the solar sector to rein in overcapacity. China controls ~90% of the world’s solar cell manufacturing capacity; that capacity has outpaced current global demand.

Is China intervening to curb overcapacity and price-cutting in solar?

Core argument: Combined first-half losses at six of China's largest solar cell and panel makers doubled to Rmb20.2bn ($2.8bn) from a year earlier, with all but one reporting widening losses, according to Wind.

China has ordered the solar sector to rein in overcapacity and cut-throat pricing as the biggest manufacturers suffer billions of dollars in losses. Six of the largest Chinese cell and panel makers saw their combined first-half losses double to Rmb20.2bn ($2.8bn) from a year earlier, with all but one reporting widening losses, according to financial information provider Wind. The losses compare with record profits in 2022 and 2023. Solar is one of the industries at the heart of Beijing’s concerns about “involution”, which refers to excess production fuelling a race to the bottom in prices. China controls about 90% of the world’s solar cell manufacturing capacity and boasts the industry’s most advanced technology. Factories in China produced 588 gigawatts of solar cells last year, surpassing domestic demand of 277GW and overseas demand of 174GW, according to Natixis data. The utilisation rate of Chinese solar module factories was 54%, according to Goldman Sachs data.

Takeaways by Macro Roundup® AI

  1. Combined first-half losses at six of China's largest solar cell and panel makers doubled to Rmb20.2bn ($2.8bn) from a year earlier, with all but one reporting widening losses, according to Wind.
  2. Beijing has ordered the solar sector to rein in overcapacity and cut-throat pricing, reflecting its concerns about "involution," in which excess production fuels a race to the bottom in prices.
  3. Chinese factories produced 588GW of solar cells last year against domestic demand of 277GW and overseas demand of 174GW, according to Natixis, with module factory utilisation at 54%, according to Goldman Sachs.

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