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, October 6, 2025

AI Summary. Ten-year inflation-adjusted bond yields have been broadly stable at about 2%, but market-implied expectations for future real yields have risen, with the 10-year real yield expected ten years ahead now around 3%, about one percentage point higher than two years earlier. Expected real yields are at their highest levels since 2010.

Jesper Rangvid Rangvid's Blog
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The market-implied 10-year real yield expected ten years from now is ~ 3%, its highest level since 2010, and ~2x what it was in early 2023. The real 20-year yield expected in 20 years is even higher, signalling high real yields for many years to come.

Do markets expect future real interest rates to rise?

Core argument: The 10-year real yield expected ten years from now stands at roughly 3%, about one percentage point higher than two years ago and roughly 1.5 percentage points higher than in early 2023.

Ten-year real yields have been broadly stable over the past two years. In late 2023, they stood at about 2%, and they remain close to that level today. By contrast, market-implied future real yields have risen noticeably. The 10-year real yield expected ten years from now is around 3%—one percentage point higher than two years ago and roughly 1.5 percentage points higher than in early 2023. The same increase is evident for the 10-year real yield expected in twenty years.The key point, thus, is not simply that market-implied forward yields exceed current yields—that is typical given an upward-sloping yield curve. Rather, the point is that expected yields have risen by more than current ones, signalling higher future real yields. These shifts represent a substantial rise in long-term real yields expectations. Indeed, the increase is so pronounced that expected real yields are now at their highest levels since 2010, as shown in Figure 2.

Takeaways by Macro Roundup® AI

  1. The 10-year real yield expected ten years from now stands at roughly 3%, about one percentage point higher than two years ago and roughly 1.5 percentage points higher than in early 2023.
  2. Ten-year real yields have been broadly stable near 2% since late 2023, while market-implied forward real yields have risen noticeably, signalling higher future real yields.
  3. Expected real yields are at their highest levels since 2010, with the same increase evident in the 10-year real yield expected twenty years ahead.

Related Articles:

  • Fiscal Risk from Rising Bond Yields — US interest rates fell for roughly 40 years before the pandemic, allowing maturing high-coupon debt to be refinanced at lower rates and keeping federal interest expense manageable even as debt rose. Because Congressional Budget Office projections assume the 10-year Treasury yield drifts down to 3.8% from about 4.1%, the author argues its debt-service projections face upside risk.
  • 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.
  • 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.

AI Summary. US tariff revenue has reached about $30bn per month, roughly $23bn of it new, and could raise about $2tn over a ten-year budget window if broad tariffs survive legal challenges. The authors argue this shift from income taxation to tariffs is hard to defend, estimating efficiency losses equal to about a third of tariff revenue.

Kimberly Clausing and Maurice Obstfeld National Bureau of Economic Research
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Tariffs generated $30B in August 2025; $27B of that was new revenue, and the current regime could raise ~$2T over the next decade. Clausing/Obstfeld’s analysis finds that the welfare losses associated with the tariffs offset over a third of the revenue.

Are tariffs an efficient substitute for income taxes?

Core argument: US tariff revenues reached about $30bn per month by August 2025, $23bn of it new relative to August 2024, and if broad tariffs survive legal challenges they could net roughly $2tn over the coming ten-year budget window.

The 2025 tax and budget legislation sharply reduced expected US income tax revenues. At the same time, a dramatic increase in the use of tariffs has caused tariff revenues to surge, reaching about $30 billion per month by August 2025, $23 billion of which is new revenue relative to August 2024. If such broad tariffs survive legal challenges, tariffs could net about $2 trillion in revenue over the coming ten-year budget window. While insufficient to pay for the recent tax legislation, they mark an important source of government revenue that may prove hard for future US administrations to forgo. [Yet] even at revenue-maximizing rates [~30 to 45%], tariff revenues would be only a fraction of current US federal income tax revenue. On conventional tax policy grounds, the US fiscal shift from income taxation to tariffs is difficult to defend. Tariffs are a particularly inefficient source of revenues that [reduce] gains from trade; the efficiency loss from tariffs at summer 2025 levels is about a third of their revenue yield, not including additional costs associated with rent-seeking. [Taking account of] intermediate goods could raise the deadweight costs of tariffs sharply [and raise projected stagflation].

Takeaways by Macro Roundup® AI

  1. US tariff revenues reached about $30bn per month by August 2025, $23bn of it new relative to August 2024, and if broad tariffs survive legal challenges they could net roughly $2tn over the coming ten-year budget window.
  2. Even at revenue-maximizing rates of roughly 30–45%, tariff revenues would amount to only a fraction of current US federal income tax revenue, and they are insufficient to pay for the 2025 tax and budget legislation that sharply reduced expected income tax revenues.
  3. The efficiency loss from tariffs at summer 2025 levels is about a third of their revenue yield, excluding costs associated with rent-seeking, and taking account of intermediate goods could raise those deadweight costs sharply.

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.
  • The Fiscal Future — US debt is on an upward trajectory, and the author argues that extraordinary growth, default, money creation, and spending cuts are each implausible or unacceptable, leaving large tax increases. US governments collect about 28% of GDP in taxes versus 35% in the UK and 46% in France, and a value-added tax could close the roughly 4%-of-GDP fiscal gap.
  • Tariffs are Dumb Enough to (Almost) Work — A universal 15% tariff on imported goods could raise roughly $300–$400bn annually, a fraction of what a value-added tax would generate but real revenue given U.S. imports of about $4tn. The author argues tariffs are a poorly designed form of consumption tax that could build political groundwork for replacing them with a more efficient value-added tax.

AI Summary. France's prime minister resigned less than a month after appointment, becoming the shortest-serving premier since 1958 and the third to leave office since snap parliamentary elections left the assembly deeply divided. Markets sold off, with 10-year government borrowing costs rising 0.06 percentage points to 3.57% and the euro falling 0.4% against the dollar.

Ian Johnston, Adrienne Klasa, Ian Smith and Emily Herbert Financial Times
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French Prime Minister Sébastien Lecornu resigned less than a month after his appointment, damaging the ability of France to confront a 5.4% of GDP budget deficit. French 10-year yields rose to 3.57%.

Are markets reacting to political instability in France?

Core argument: French Prime Minister Sébastien Lecornu resigned less than a month after his appointment, the Élysée Palace said, making him the shortest-serving prime minister since the Fifth Republic was established in 1958.

France’s Prime Minister Sébastien Lecornu has resigned less than a month after his appointment, prompting a market sell-off amid concern about dysfunction in the Eurozone’s second-biggest economy. Lecornu, a long-serving ally of French President Emmanuel Macron, submitted his resignation on Monday morning, the Élysée Palace said, making him the shortest-serving prime minister since the Fifth Republic was established in 1958 and heaping pressure on the president. Lecornu was the third prime minister appointed by Macron since snap parliamentary elections in summer 2024, a vote that left the French assembly bitterly divided and has made governing almost impossible. All three have now left office. A fall in government bond prices pushed up the country’s 10-year borrowing costs by 0.06 percentage points to 3.57%. The euro fell 0.4% against the dollar.

Takeaways by Macro Roundup® AI

  1. French Prime Minister Sébastien Lecornu resigned less than a month after his appointment, the Élysée Palace said, making him the shortest-serving prime minister since the Fifth Republic was established in 1958.
  2. France's 10-year borrowing costs rose 0.06 percentage points to 3.57% as government bond prices fell, and the euro dropped 0.4% against the dollar amid concern about dysfunction in the Eurozone's second-biggest economy.
  3. Sébastien Lecornu was the third prime minister appointed by Emmanuel Macron since the summer 2024 snap parliamentary elections, a vote that left the French assembly bitterly divided; all three have now left office.

Related Articles:

  • ECB Yield Caps and TARGET2 Balances — Unlike International Monetary Fund programs, whose conditionality and stigma push borrowing countries to reform quickly, the euro system's internal cross-border payment imbalances carry neither and have persisted far longer. The author argues their persistence is evidence that the European Central Bank's de facto yield caps keep high-debt countries' borrowing costs artificially low.
  • Europe’s Right-Wing Populists Swerve Left on the Economy — Right-wing populist parties across Europe, including the Sweden Democrats, Austria's Freedom Party, Germany's Alternative for Germany and France's National Rally, have shifted from small-government, low-tax, free-trade platforms toward calls for higher welfare benefits, subsidies and protectionism, often alongside pro-market positions.
  • French Companies’ Borrowing Costs Fall Below Government’s As Debt Fears Intensify — Bond yields for French companies including L'Oréal, Airbus and Axa have fallen below those on French government debt of similar maturity, with 10 French firms trading at a negative spread to the sovereign — the most in data going back to 2006, according to Goldman Sachs. Sovereign yields typically set a baseline for corporate bonds.

AI Summary. Global data center power demand is projected to rise about 165% by 2030 versus 2023, with 60% of new US needs requiring roughly 72 GW of new generation, mainly natural gas (60%), plus solar and wind. US grid investment is estimated at $780bn through 2030, skewed toward distribution and transmission.

Eric Sheridan, James Schneider, Kash Rangan, Gabriela Borges, et al. Goldman Sachs
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Goldman estimates overall American power demand is accelerating to a 2.5% CAGR (a growth rate not seen since the 1990s), ~ 40% of which is driven by datacenters. They estimate that 60% of the new generation capacity will be sourced from natural gas.

How much new power generation and grid investment will data centers require?

Core argument: Global datacenter power demand is expected to rise ~165% by 2030 versus 2023, with 60% of future US needs requiring new generation and an estimated 72 GW of incremental capacity.

Meeting [new datacenter electrical] demand will require a major build-out of generation capacity. We expect a ~165% rise in datacenter power demand globally by 2030 vs. 2023. In the US, we estimate that 60% of future needs will require new generation, leading to an estimated 72 GW of incremental capacity - sourced primarily from natural gas (60%), supported by solar (25-30%) and wind (10-15%). In the US, datacenters contribute ~1% CAGR to overall power demand, underscoring a persistent, secular lift as overall US power demand accelerates to a 2.5% CAGR, which has not been seen since the 1990s. Sustaining this growth requires significant investment in the power grid. Since July 2025, our US grid investment expectations have risen by $60bn to $780bn through 2030 (from previous $720bn), with a skew towards distribution infrastructure and faster growth in transmission capex to sustain datacenter supply growth & accommodate the broader increase in power demand.

Takeaways by Macro Roundup® AI

  1. Global datacenter power demand is expected to rise ~165% by 2030 versus 2023, with 60% of future US needs requiring new generation and an estimated 72 GW of incremental capacity.
  2. The estimated 72 GW of incremental US capacity would be sourced primarily from natural gas (60%), supported by solar (25–30%) and wind (10–15%).
  3. US grid investment expectations have risen by $60bn to $780bn through 2030, from $720bn previously, skewed toward distribution infrastructure with faster growth in transmission capex.

Related Articles:

  • The Blob: Capital, China, Chips, Chicago and Chilliwack — Data center construction spending has eclipsed office construction, and the specialized power rates most data centers pay fall short of covering the cost of a new natural gas plant, leaving other customers to bear part of the bill. In the PJM grid region, data center demand accounted for 70% of the increase in electricity costs over the past year.
  • Power Check: Watt’s Going On With The Grid? — Bank of America Global Research estimates US electricity demand will grow at a 2.5% compound annual rate through 2035, up from 0.5% annually over the prior decade, driven by building electrification, data centers, industrial demand, and electric vehicles. Meeting it requires greater utility investment in grid capacity.
  • Electricity 2025 — US electricity demand is projected to grow about 2% annually over 2025-2027, an upward revision from an earlier 1% forecast. A study commissioned by the US Department of Energy found data centre electricity use rose from about 60 TWh in 2014 to 176 TWh in 2023, and could reach 325-580 TWh by 2028.

AI Summary. OpenAI has agreed to buy tens of billions of dollars of chips from AMD, totaling 6 gigawatts of power consumption, under a deal that could give OpenAI a roughly 10% stake in the $270bn chipmaker over time. OpenAI executives estimate 1GW of capacity costs about $50bn to bring online.

George Hammond and Michael Acton Financial Times
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OpenAI will buy chips from AMD with power demand of 6GW, roughly equal to Singapore’s mean demand. Over the next five years, OpenAI has committed to 23GW of new capacity, which will cost over $1T to bring online.

Can a chipmaker grant an AI buyer an ownership stake?

Core argument: OpenAI agreed to buy tens of billions of dollars' worth of AMD chips and could take a roughly 10% stake in the $270bn chipmaker over time, with no total dollar figure disclosed.

OpenAI has agreed to buy tens of billions of dollars’ worth of chips from AMD as part of a deal that could also see the ChatGPT maker take a roughly 10% stake in the $270bn chipmaker over time. The San Francisco-based artificial intelligence start-up said it had agreed to purchase processors with a total power consumption of 6 gigawatts, roughly equivalent to Singapore’s average demand. The companies did not put a total dollar figure on the transaction, but OpenAI executives estimate that 1GW of capacity costs about $50bn to bring online, with two-thirds of that spent on chips and the infrastructure to support them. The deal comes just a fortnight after AMD’s rival Nvidia announced it planned to invest $100bn in OpenAI, with the two companies pledging to deploy 10GW of new data centre capacity.

Takeaways by Macro Roundup® AI

  1. OpenAI agreed to buy tens of billions of dollars' worth of AMD chips and could take a roughly 10% stake in the $270bn chipmaker over time, with no total dollar figure disclosed.
  2. The AMD processors OpenAI agreed to purchase carry a total power consumption of 6GW, roughly equivalent to Singapore's average demand.
  3. OpenAI executives estimate that 1GW of capacity costs about $50bn to bring online, with two-thirds spent on chips and supporting infrastructure.

Related Articles:

  • The Blob: Capital, China, Chips, Chicago and Chilliwack — Data center construction spending has eclipsed office construction, and the specialized power rates most data centers pay fall short of covering the cost of a new natural gas plant, leaving other customers to bear part of the bill. In the PJM grid region, data center demand accounted for 70% of the increase in electricity costs over the past year.
  • Data Centers: More Money, Fewer Buyers — Data center developers can earn 12–15% returns on new construction while stabilized hyperscale campuses trade at 4–5% capitalization rates, drawing capital into development. Because long, flat leases to Amazon, Microsoft and Google make finished assets behave like annuities, few buyers exist, so developers turn to securitization instead of selling.
  • The Kanye/Data Center Crossover — Data center capital spending differs from fiber and railroad investment because most of the cost sits in processors that are replaced every 3-4 years rather than in long-lived shells, power, and cooling connections. That short replacement cycle requires returns high enough to exceed a risk-adjusted cost of capital of 12-14% before the hardware must be replaced.

AI Summary. South Korea's fertility rate fell below 1.7 in 1985 and its share of population aged 20-40 has fallen 20% since 2000, yet it ranked first in Bloomberg's Innovation Index and twelfth in a global soft power ranking. The author argues low fertility does not inevitably cause technological and cultural stagnation.

Adair Turner Project Syndicate
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Adair Turner, citing South Korea’s continued ability to innovate despite plummeting fertility, argues that population decline doesn’t necessarily imply a slowdown in growth; only a small fraction of the population drives technological advances.

Does low fertility inevitably cause technological and cultural stagnation?

Core argument: South Korea's fertility rate fell below 1.7 in 1985 and the share of its population aged 20–40 has declined by 20% since 2000, yet the country ranked first in Bloomberg's 2021 Innovation Index.

South Korea is a case in point. Its fertility rate fell below 1.7 in 1985, and the share of its population aged 20-40 has declined by 20% since 2000, yet the country still ranked first in Bloomberg’s 2021 Innovation Index. Earlier this year, it ranked twelfth in the Brand Finance Global Soft Power Index 2025, a “meteoric ascent” attributed to its “dominance in arts and entertainment” and the worldwide appeal of its cultural exports, whether K-pop, K-dramas like Squid Game, or K-beauty products. At just 0.8, South Korea’s fertility rate may eventually sap its innovative vitality. But the idea that low fertility rates inevitably result in technological and cultural stagnation is supported by neither logic nor empirical evidence.

Takeaways by Macro Roundup® AI

  1. South Korea's fertility rate fell below 1.7 in 1985 and the share of its population aged 20–40 has declined by 20% since 2000, yet the country ranked first in Bloomberg's 2021 Innovation Index.
  2. South Korea ranked twelfth in the Brand Finance Global Soft Power Index 2025, an ascent attributed to its dominance in arts and entertainment and the worldwide appeal of cultural exports including K-pop, K-dramas such as Squid Game, and K-beauty products.
  3. Neither logic nor empirical evidence supports the claim that low fertility rates inevitably produce technological and cultural stagnation, though South Korea's fertility rate of 0.8 may eventually sap its innovative vitality.

Related Articles:

  • The End of Children — South Korea's fertility rate of 0.7 is the lowest of any nation and may be the lowest in recorded history; if sustained, each generation would be about a third the size of the one before, with every 100 people of childbearing age producing roughly 12 grandchildren. Annual births fell from 1m in 1970 to 230,000 in 2023.
  • Depopulation Globally and in the Asia-Pacific: The Shape of Things to Come — Population aging and fertility below replacement levels are connected to a revolution in family structure in which families grow smaller, fewer people marry, and voluntary childlessness becomes common across countries. As a result, families become less able to bear the demands that may be placed on them.
  • World Depopulation: Prospects and Implications — The US is projected to account for a growing share of the rich world's labor force, youth, and highly educated talent, with continuing population and labor force growth and only moderate aging through 2050. Its fertility, though below replacement, exceeds that of East Asian and nearly all European countries, and sustained legal immigration is essential to this demographic advantage.

Tuesday, October 7, 2025

AI Summary. French 10-year government bond yields rose more than other euro-zone yields and now trade at a slightly wider spread than Italy's, the first time since the euro's 1999 launch. Broader markets remain calm on the assumption that France is too big to be allowed to fail and that the European Central Bank would support it.

John Authers Bloomberg
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French 10-Year OATS now trade at a higher spread than Italy’s equivalent BTPs. John Authers warns that the relative calm is only due to investors’ belief that France is too big to fail and the ECB will intervene, implying “a long and steady debasement.”

Are markets staying calm even as French yields exceed Italy's?

Core argument: French government bond yields rose far more than other euro-zone yields, leaving French debt trading at a slightly higher spread than equivalent Italian BTPs for the first time since the euro launched in 1999.

The yield on French OATS rose far more than other euro-zone bond yields. Confidence in French debt is so shaken that they now trade at a slightly higher spread than Italy’s equivalent BTPs. That hasn’t happened since the euro launched in 1999. While this is very concerning for France, the conditions are nothing like the crisis that afflicted the euro zone’s sovereign debt from 2010 to 2012. The currency weakened only very slightly Monday, while 10-year German bund yields, at 2.72%, remain below the 2.9% they hit when Berlin rolled out a fiscal expansion plan in March. The relative calm is ultimately because the market assumes that France is far too big to be allowed to fail, and that the European Central Bank will tide it through one way or another. Even though most of the biggest French companies are multinationals with little exposure to their domestic economy, the CAC 40 index has lagged the rest of Europe by some 14% since the beginning of last year.

Takeaways by Macro Roundup® AI

  1. French government bond yields rose far more than other euro-zone yields, leaving French debt trading at a slightly higher spread than equivalent Italian BTPs for the first time since the euro launched in 1999.
  2. Conditions differ from the 2010–2012 euro-zone sovereign debt crisis, with the euro weakening only very slightly and 10-year German bund yields at 2.72%, below the 2.9% reached when Berlin unveiled its fiscal expansion plan in March.
  3. The CAC 40 index has lagged the rest of Europe by some 14% since the beginning of last year, even though most of the largest French companies are multinationals with little exposure to the domestic economy.

Related Articles:

  • French Companies’ Borrowing Costs Fall Below Government’s As Debt Fears Intensify — Bond yields for French companies including L'Oréal, Airbus and Axa have fallen below those on French government debt of similar maturity, with 10 French firms trading at a negative spread to the sovereign — the most in data going back to 2006, according to Goldman Sachs. Sovereign yields typically set a baseline for corporate bonds.
  • Europe’s Right-Wing Populists Swerve Left on the Economy — Right-wing populist parties across Europe, including the Sweden Democrats, Austria's Freedom Party, Germany's Alternative for Germany and France's National Rally, have shifted from small-government, low-tax, free-trade platforms toward calls for higher welfare benefits, subsidies and protectionism, often alongside pro-market positions.
  • ECB Yield Caps and TARGET2 Balances — Unlike International Monetary Fund programs, whose conditionality and stigma push borrowing countries to reform quickly, the euro system's internal cross-border payment imbalances carry neither and have persisted far longer. The author argues their persistence is evidence that the European Central Bank's de facto yield caps keep high-debt countries' borrowing costs artificially low.

AI Summary. Market pricing for Japan's 10-year government bond yield 20 years from now stands at 4.52%, far above its current 10-year yield of 1.69%, while France's equivalent forward yield is 5.03% versus a 3.57% 10-year yield. The author argues these large risk premiums, alongside a falling Yen, signal mounting fiscal stress.

Robin Brooks Robin Brooks Substack
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Long Japanese yields spiked, and the Yen fell in response to the likely new prime minister’s “reputation as a fiscal dove.” Robin Brooks describes the divergence btw 10y20y fwd and simple 10-year yields as “scary.”

Do far-above-current forward bond yields signal mounting fiscal stress?

Core argument: Japan's 10y20y forward yield, backed out from 20- and 30-year government bond yields, jumped to 4.52% from 4.26% on Friday, alongside a sharp fall in the Yen, which the author calls tell-tale signs of mounting fiscal stress.

Each chart shows the 10-year government bond yield in blue and the 10y20y forward yield in red. The latter is what markets price for the 10-year yield 20 years from now, which I back out from 20- and 30-year government bond yields. Japan’s 10y20y yield yesterday jumped to 4.52%, up from 4.26% on Friday. That’s a massive move for longer-term yields, which was accompanied by a sharp fall in the Yen. Rising yields with a falling currency are tell-tale signs of mounting fiscal stress. For perspective, Japan’s simple 10-year yield was 1.69% yesterday. The risk premium for Japan’s longer-term trajectory is scary. France’s 10y20y forward yield yesterday jumped to 5.03%, up from 4.96% on Friday. Its simple 10-year yield is 3.57%. A massive risk premium is building, the result of a deeply divided electorate and a President who’s trying to hang on to keep the extreme right out of power.

Takeaways by Macro Roundup® AI

  1. Japan's 10y20y forward yield, backed out from 20- and 30-year government bond yields, jumped to 4.52% from 4.26% on Friday, alongside a sharp fall in the Yen, which the author calls tell-tale signs of mounting fiscal stress.
  2. Japan's simple 10-year government bond yield stood at 1.69%, far below the 4.52% that markets price for the 10-year yield 20 years from now, a risk premium the author describes as scary.
  3. France's 10y20y forward yield rose to 5.03% from 4.96% on Friday against a simple 10-year yield of 3.57%, a risk premium the author attributes to a deeply divided electorate and a President trying to keep the extreme right out of power.

Related Articles:

  • 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.
  • Fiscal Risk from Rising Bond Yields — US interest rates fell for roughly 40 years before the pandemic, allowing maturing high-coupon debt to be refinanced at lower rates and keeping federal interest expense manageable even as debt rose. Because Congressional Budget Office projections assume the 10-year Treasury yield drifts down to 3.8% from about 4.1%, the author argues its debt-service projections face upside risk.
  • 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. Gold topped $4,000 a troy ounce for the first time, with futures rising more than 50% in a year — a bigger run-up than during the pandemic or the 2007-09 recession, and the largest since the inflationary shock of 1979. Central-bank buying has helped gold surpass the euro as the world's second-largest reserve asset.

David Uberti Wall Street Journal
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Gold’s spot price has risen 50% since the start of the year. Since Powell’s Jackson speech, gold has risen 18% while the dollar has remained stable against G10 currencies in a broad debasement of advanced economies’ currencies relative to gold.

Is central-bank buying driving gold to record highs?

Core argument: Gold topped $4,000 a troy ounce for the first time, with futures up more than 50% in 2025, outpacing rallies during the pandemic and the 2007-09 recession and rising more in a year than at any time since the 1979 inflationary shock.

Gold soared to $4,000 a troy ounce for the first time. The price of the precious metal has surged this year more than it did during some of America’s biggest crises. Rising more than 50%, futures’ run-up in 2025 has outpaced rallies during the pandemic and 2007-09 recession. Not since the inflationary shock of 1979 has gold catapulted so much higher in a year. Central banks around the world have gobbled up gold for more than a decade, helping the precious metal surpass the euro as the world’s second-largest reserve asset this year. Central banks bought 415 tons of gold in the first half, according to the World Gold Council, and many analysts expect continued central-bank purchases next year to support prices.

Takeaways by Macro Roundup® AI

  1. Gold topped $4,000 a troy ounce for the first time, with futures up more than 50% in 2025, outpacing rallies during the pandemic and the 2007-09 recession and rising more in a year than at any time since the 1979 inflationary shock.
  2. Central banks bought 415 tons of gold in the first half of the year, according to the World Gold Council, extending more than a decade of accumulation.
  3. Gold surpassed the euro this year as the world's second-largest reserve asset, and many analysts expect continued central-bank purchases next year to support prices.

Related Articles:

  • Dollar Dominance and Dollar Depreciation — Moving On Different Tracks — The dollar is projected to depreciate as less exceptional US economic and market performance makes it harder to attract unhedged capital flows to fund a large current account and fiscal deficit, leaving a high currency valuation to correct further. A softening US labor market supports that view.
  • State of Chinese Gold Demand — Gold broke above its $3,200–$3,400 range to a record high above $3,600, with the near-term catalyst identified as threats to Federal Reserve independence driving US investor demand. Chinese total gold demand bottomed near $9bn and nearly doubled to $16bn before moderating to about $13bn as private-sector buying partially normalized.
  • De-Dollarization? Diversification? Exploring Central Bank Gold Purchases and the Dollar’s Role in International Reserves — Central banks' gold accumulation is generally not associated with reducing the dollar's share of international reserves at the country level, apart from a few prominent cases, and is more consistent with modest overall diversification. Gold's role as an official-sector store of value has grown, but its use as a unit of account and medium of exchange remains limited.

AI Summary. Energy companies are investing nearly $50bn over five years in 8,800 miles of new and planned US natural gas pipelines to serve record liquefied natural gas exports and data centre demand, according to energy consulting firm Wood Mackenzie. US natural gas consumption is expected to rise 1% this year to an all-time high of 91.4bn cubic feet per day.

Kristina Shevory Financial Times
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8,800 miles of natural gas pipeline are planned or under construction in the US; over the next five years, ~$50B will be spent on pipeline construction.

Are energy companies expanding US gas pipelines to meet record demand?

Core argument: Energy companies are investing almost $50bn over the next five years in new and planned US pipelines to capitalize on a boom in natural gas demand and regulatory changes under President Donald Trump.

Energy companies are ploughing almost $50bn into new and planned pipelines over the next five years to cash in on a boom in natural gas demand and regulatory changes under US President Donald Trump. Midstream companies are building or planning 8,800 miles of pipelines across the country to meet record liquefied natural gas exports and data centre demand, according to Wood Mackenzie, an energy consulting firm. American natural gas consumption is expected to climb 1% this year to an all-time high of 91.4bn cubic feet per day, according to the US Energy Information Administration. Exports of LNG from the US, the world’s biggest exporter, hit a record in September of 9.4mn metric tonnes.

Takeaways by Macro Roundup® AI

  1. Energy companies are investing almost $50bn over the next five years in new and planned US pipelines to capitalize on a boom in natural gas demand and regulatory changes under President Donald Trump.
  2. Midstream companies are building or planning 8,800 miles of US pipelines to serve record liquefied natural gas exports and data centre demand, according to Wood Mackenzie.
  3. US natural gas consumption is expected to rise 1% this year to an all-time high of 91.4bn cubic feet per day, according to the US Energy Information Administration, while September LNG exports hit a record 9.4mn metric tonnes.

Related Articles:

  • U.S. Primary Energy Production, Consumption, and Exports Increased In 2024 — The United States produced more energy than it consumed, with primary energy production reaching a record 103.3 quadrillion British thermal units and consumption at 94.2 quadrillion, still below the 2007 peak of 99.0 quadrillion. Energy exports rose 4% to a record 30.9 quadrillion while imports held at 21.7 quadrillion, the largest net exports in records back to 1949.
  • The New Joule Order — Ample physical capacity keeps inflation low and stable and allows lower interest rates, but when demand catches up to capacity constraints, better returns in the physical economy pull capital back to fund expansion, making a commodity super-cycle a capital-expenditure cycle. In real terms, total energy investment is below its level 15 years ago.
  • 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. The US government is taking a 10% stake in Canadian miner Trilogy Metals for $35.6mn and has approved Alaska's Ambler Road project, which would open remote areas to mining companies, as part of an effort to reduce US dependence on China for critical resources. The agreement also allows the federal government to acquire a further 7.5% of Trilogy.

Jamie Smyth, Camilla Hodgson and Lauren Fedor Financial Times
Date Posted:

The US is taking a 10% stake in Canada’s Trilogy Metals in an effort to increase Alaskan and Canadian production of copper, cobalt, gallium and germanium.

Is the US taking equity in miners to reduce dependence on China?

Core argument: The Trump administration announced a $35.6mn investment for a 10% stake in Canadian miner Trilogy Metals, with the agreement enabling the federal government to acquire a further 7.5%, according to the White House.

The Trump administration has said it will take a 10% stake in a Canadian mining company and allow a controversial infrastructure project in Alaska as it aims to break US dependency on China for critical resources. The $35.6mn investment in Trilogy Metals was announced on Monday as the White House approved the Ambler Road project, which the Biden administration had blocked based on its environmental impact. The road would open remote areas to mining companies including Trilogy. The agreement also enabled the federal government to acquire a further 7.5% of Trilogy, said the White House in a statement.

Takeaways by Macro Roundup® AI

  1. The Trump administration announced a $35.6mn investment for a 10% stake in Canadian miner Trilogy Metals, with the agreement enabling the federal government to acquire a further 7.5%, according to the White House.
  2. The White House approved Alaska's Ambler Road project, which the Biden administration had blocked based on its environmental impact, and the road would open remote areas to mining companies including Trilogy.
  3. The Trump administration said the Trilogy stake and Ambler Road approval aim to break US dependency on China for critical resources.

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