Edward Conard

Top Ten New York Times Bestselling Author

  • “…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 fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “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
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Thursday, October 16, 2025

AI Summary. Using a standard price index, US men's earnings were flat from 1973 to 1989 and rose 0.4% a year thereafter, while an alternative middle-class cost-of-living index shows 0.7% annual growth in both periods and a 40% total rise instead of 13%. The author attributes weak growth to 1970s stagflation and early-1980s recessions rather than trade, immigration, or income concentration.

Scott Winship American Enterprise Institute
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Adjusting earnings with the relatively standard PCEPI deflator, Winship finds that real earnings of year-round male workers aged 15+ were flat from 1973–79, but grew 13% from 1989–2023. With his experimental MACPI deflator, they grew 40% over 1973–2023.

How much have middle-class men's earnings grown over fifty years?

Core argument: Deflated by the PCE price index, men's earnings were flat over the 16 years from 1973 to 1989 and rose 0.4% per year over the 34 years from 1989 to 2023.

As shown in Table 2, during the 16 years from 1973 to 1989, men’s earnings [deflated by the relatively standard PCEPI] were flat, but during the 34 years from 1989 to 2023, they rose by 0.4% per year. The biggest problem for men over the past 50 years was a period of stagnation or decline that ended 40 years ago, with 1983 marking its low point. While the economy was underperforming for a stretch, that period has receded into the distant past, and things are on the upswing. Explanations for why growth wasn’t stronger have less to do with the China Shock, immigration, the global financial crisis, the Great Recession, or rising income concentration than they do with the stagflation of the 1970s and the deep recessions of the early 1980s. When we use the [more experimental] MACPI [which focuses on a basket of goods that Winship regards as more representative of those purchased by the middle class] to adjust for the rise in the cost of living, instead of rising by 13%, male year-round workers’ earnings rose by 40%. Men’s earnings rose 0.7% per year from 1973 to 1989 and 0.7% per year from 1989 to 2023.

Takeaways by Macro Roundup® AI

  1. Deflated by the PCE price index, men's earnings were flat over the 16 years from 1973 to 1989 and rose 0.4% per year over the 34 years from 1989 to 2023.
  2. Using the more experimental MACPI, a basket Winship regards as more representative of middle-class purchases, male year-round workers' earnings rose 40% rather than 13%, gaining 0.7% per year in both 1973–1989 and 1989–2023.
  3. Winship attributes weaker male earnings growth over the past 50 years to the stagflation of the 1970s and the deep recessions of the early 1980s, with 1983 the low point, rather than the China Shock, immigration, the financial crisis, or rising income concentration.

Related Articles:

  • The American Dream Is Not a Coin Flip, and Wages Have Not Stagnated — Using an alternative cost-of-living adjustment, the typical 40-year-old's pre-tax family income rose 52% between 1979 and 2019, or 73% adjusting for family size, versus 15% under the methods behind widely cited mobility estimates. Absolute mobility is down 20 percentage points since 1979 but stood at 72% in 2023.
  • Should We Believe the Economic Data or Americans’ “Lyin’” Eyes? The Answer Is Yes — Gallup polling finds that while roughly 80% of Americans say they are dissatisfied with the way things are going in the country, about 80% are satisfied with the way things are going in their own lives, including 90% satisfied with family life, 88% with housing, and 87% each with education and work.
  • Income in the United States: 2024 — U.S. median household income was $83,730, not statistically different from the prior year's $82,690, according to Census Bureau estimates. Across most demographic subgroups, median household income was higher or not statistically different from the prior year, with the exception of Black households, which saw a decline.

AI Summary. The International Energy Agency reports China is investing twice as much as the US in power plants, storage and the grid, and China added about 429 gigawatts of new generation in a year versus roughly 50 gigawatts in the US. US high-voltage transmission additions have fallen below earlier five-year averages.

Jennifer Hiller Wall Street Journal
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The US built 888 miles of new high-voltage transmission lines in 2024, less than the 2015–2019 mean of 900 miles and the 2009–2014 mean of 1,700 miles.

Is China outpacing the US in power generation and grid investment?

Core argument: China added about 429 gigawatts of new power generation last year versus about 50 gigawatts in the U.S., according to Climate Energy Finance, and will invest twice as much as the U.S. this year in power plants, storage and the grid, per the International Energy Agency.

China will invest twice as much as the U.S. this year in power plants, storage and the grid, according to the International Energy Agency. It added about 429 gigawatts of new power generation last year, according to the think tank Climate Energy Finance, while the U.S. built about 50 gigawatts. ICF [a consultancy] forecasts the U.S. will deliver almost 80 gigawatts of new generation starting in 2027, doubling the average pace of the past five years. [US] transmission construction has bogged down. The U.S. added 888 miles of new high-voltage transmission lines last year, and 450 miles the year before, according to a report from Grid Strategies. That’s down from an average of more than 900 miles a year between 2015 and 2019, and more than 1,700 miles a year on average for the five-year period before that.

Takeaways by Macro Roundup® AI

  1. China added about 429 gigawatts of new power generation last year versus about 50 gigawatts in the U.S., according to Climate Energy Finance, and will invest twice as much as the U.S. this year in power plants, storage and the grid, per the International Energy Agency.
  2. The consultancy ICF forecasts the U.S. will deliver almost 80 gigawatts of new generation starting in 2027, double the average pace of the past five years.
  3. The U.S. added 888 miles of new high-voltage transmission lines last year and 450 miles the year before, down from an average above 900 miles a year in 2015–2019 and more than 1,700 miles a year in the prior five years, according to Grid Strategies.

Related Articles:

  • How A Power Shortage Could Short-Circuit Nvidia’s Rise — Analysts estimate Nvidia will sell roughly 6m Blackwell and 5.5m GB chips over a two-year span, and that if half are installed and run at capacity in America they would add 25GW to power demand. Bernstein projects a US shortfall of 17–62GW by 2030 depending on chip efficiency; Morgan Stanley puts the gap at 45GW by 2028.
  • The Real China Model — China generates more electricity annually than the United States and European Union combined, having added capacity equivalent to the United Kingdom's total supply each year. Electricity makes up nearly 30% of China's energy use, versus 22% in the US and 21% globally, and its share is growing about 6% a year.
  • 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. China expanded its rare earth export controls to require licenses for any product containing more than 0.1% by value of Chinese rare earths or made with equipment containing them, with a presumption of denial for military uses and scrutiny of advanced semiconductor uses. Aggressive enforcement would affect industries from chips and autos to aerospace, defense and medical equipment.

Michael Cembalest JP Morgan
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The US imports 80 to 100% of critical minerals, of which 50 to 100% come from China. If new Chinese controls on mineral exports remain in place, Cembalest argues, “the eventual impact on US military, industrial and renewable energy output would be huge.”

How far do China's expanded rare earth export controls reach?

Core argument: China requires export licenses for any product containing more than 0.1% in value of Chinese rare earths, or made using equipment containing Chinese rare earths or related magnets.

China broadened the scope of its rare earth export controls to require licenses for any product containing more than 0.1% in value of Chinese rare earths, or manufactured using equipment containing Chinese rare earths or related magnets. The regulations include a presumption of denial for military end-uses and close scrutiny on uses related to high-end semiconductor production. The new rules expand the number of specific rare earth minerals covered and also limit the export of rare earth mining and manufacturing equipment from China. China's new rare earth rules match what the US has imposed for high end chips and semiconductor production equipment: a "foreign direct product rule" that controls not only direct exports of a targeted product, but other countries' exports that embed that product. If these controls are aggressively implemented by China, the impacts would be felt in semiconductor, automotive, consumer electronics, aerospace, defense, robotics, medical imaging, medical equipment and telecommunications industries.

Takeaways by Macro Roundup® AI

  1. China requires export licenses for any product containing more than 0.1% in value of Chinese rare earths, or made using equipment containing Chinese rare earths or related magnets.
  2. China's rules carry a presumption of denial for military end-uses and close scrutiny of uses tied to high-end semiconductor production, while expanding the list of covered rare earth minerals and limiting exports of rare earth mining and manufacturing equipment.
  3. China's rare earth rules match the US "foreign direct product rule" for high-end chips and semiconductor production equipment, and aggressive implementation would affect semiconductor, automotive, consumer electronics, aerospace, defense, robotics, medical imaging, medical equipment and telecommunications industries.

Related Articles:

  • China Cracks Down On Foreign Companies Stockpiling Rare Earths — China is warning foreign buyers of rare earths and derived products such as magnets that building large inventories will bring supply restrictions, and is limiting approved export volumes to prevent stockpiling, according to people familiar with the matter.
  • China’s Weaponisation of Rare Earths is a New Kind of Trade War — China's export controls on rare earth materials and magnets threatened to halt production across the auto industry, the largest manufacturing sector in most advanced economies, and forced Washington to negotiate on tariffs. Despite China's well-known dominance of rare earth production, Western governments and companies have not developed alternative suppliers.
  • Pentagon Steps Up Stockpiling Of Critical Minerals With $1bn Buying Spree — The US Defense Logistics Agency has signaled plans to buy up to $500m of cobalt, $245m of antimony, $100m of tantalum and a combined $45m of scandium for its critical minerals stockpile, valued at $1.3bn. Stockpiled materials can be released only by the president in declared war or when deemed necessary for national defense.

AI Summary. The Dutch government took control of chipmaker Nexperia under a Cold War-era law on access to essential products after US officials said replacing its Chinese chief executive was almost certainly required to keep the company off a US sanctions list. The CEO was suspended and replaced by its European finance chief.

Patrick Van Oosterom and Charlotte Hughes-Morgan Bloomberg
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The Dutch government has taken control of chipmaker Nexperia over American and Dutch concerns that the firm was unable to act independently of its Chinese parent company Wingtech, which acquired Nexperia in 2019.

Did US sanctions pressure drive a government takeover of a Chinese-owned chipmaker?

Core argument: The Dutch government seized control of chipmaker Nexperia after US officials warned in a June meeting that "it is almost certain that the CEO will have to be replaced to qualify for the exemption from the entity list.".

The Dutch government’s unprecedented move to seize control of Nexperia followed a US warning that the chipmaker would have to replace its Chinese chief executive officer to stay off a list of sanctioned companies. US officials told the Dutch government in a meeting in June that “it is almost certain that the CEO will have to be replaced to qualify for the exemption from the entity list,” according to a record of the proceedings released in a Dutch court ruling. The ruling detailed the arguments for the government takeover. Concerns around Nexperia’s governance culminated with the Dutch state taking over Nexperia via a Cold War-era law designed to shore up access to essential products in an emergency. Nexperia’s CEO and Wingtech’s founder, Zhang Xuezheng, was suspended and replaced with his European chief financial officer.

Takeaways by Macro Roundup® AI

  1. The Dutch government seized control of chipmaker Nexperia after US officials warned in a June meeting that "it is almost certain that the CEO will have to be replaced to qualify for the exemption from the entity list.".
  2. The Netherlands took over Nexperia using a Cold War-era law designed to shore up access to essential products in an emergency, with a Dutch court ruling detailing the arguments for the takeover.
  3. Nexperia CEO and Wingtech founder Zhang Xuezheng was suspended and replaced by the company's European chief financial officer, following concerns over Nexperia's governance.

Related Articles:

  • China Seeks To Triple Output Of AI Chips In Race With The US — China is preparing three new fabrication plants dedicated to producing Huawei's artificial intelligence processors, and people familiar with the effort say their combined capacity, once fully ramped up, could exceed current output from comparable lines at SMIC, China's leading chipmaker. Huawei denies having plans to launch its own fabrication plants.
  • China Has Its Own Concerns About Nvidia H20 Chips — China's leaders cite security concerns, including suspicion of hidden back doors in US-designed chips, as a rationale for their drive toward chip self-sufficiency. The dilemma extends beyond chips: US intelligence reportedly found extra modems on Chinese-made port cranes, and the US has banned Chinese components from connected auto systems.
  • China Intensifies Push to ‘Delete America’ From Its Technology — A Chinese government directive requires state-owned companies in finance, energy, and other sectors to replace foreign software in their information technology systems by 2027, part of a broader push to remove U.S. technology. Hardware makers were targeted first, with Dell, IBM, and Cisco equipment gradually replaced by Chinese products.

AI Summary. The Bureau of Justice Statistics' National Crime Victimization Survey found the violent crime rate in urban areas rose 61% over five years, while smaller increases in suburban (4%) and rural (2%) areas were not statistically significant. Urban violent crime ended 46% above the national rate and 104% above the rural rate.

Jeffrey Anderson Wall Street Journal
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The rate of violent crime in urban areas increased 61% between 2019 and 2024, compared to increases of just 4% in suburban areas and 2% in rural areas over that period, according to the National Crime Victimization Survey.

Has violent crime risen in cities but not suburbs and rural areas?

Core argument: The Bureau of Justice Statistics' National Crime Victimization Survey finds the rate of violent crime in urban areas rose 61% from 2019 to 2024, with the increase confined to cities.

Newly released results from the Bureau of Justice Statistics’ National Crime Victimization Survey [find] that the rate of violent crime in urban areas increased by 61% from 2019 to 2024. That crime spike was found only in cities. In suburban and rural areas, the observed increase in violent crime over that same span—4% and 2%, respectively—wasn’t statistically significant. In 2019, before George Floyd, pandemic closures and the defund-the-police movement, the rate of violent crime in urban areas was roughly identical to the rate nationwide. In 2024, the rate of violent crime in urban areas was 46% higher than the nationwide rate and 104% higher—more than double—the rural rate.

Takeaways by Macro Roundup® AI

  1. The Bureau of Justice Statistics' National Crime Victimization Survey finds the rate of violent crime in urban areas rose 61% from 2019 to 2024, with the increase confined to cities.
  2. Suburban and rural violent crime rose 4% and 2% respectively from 2019 to 2024, increases that were not statistically significant in the National Crime Victimization Survey.
  3. The urban violent crime rate was roughly identical to the nationwide rate in 2019 but by 2024 stood 46% above the nationwide rate and 104% above the rural rate.

Related Articles:

  • The Collapse of Broken-Windows Policing in New York City, Los Angeles, and Washington, DC, 2013–22 — Arrests for minor "broken-windows" offenses—counted as misdemeanors, violations, and infractions per 100,000 residents—fell 74% in New York, 77% in Washington, DC, and 81% in Los Angeles over the period studied, declining steadily in New York and Los Angeles.
  • How Many Are Criminals — In the United States, between one in four and one in three Black men eventually serve prison time, compared with one in seven Hispanic men and roughly one in fifteen non-Hispanic white men. In Denmark, about 9% of men of Danish origin and 27% of men of non-Western origin have a criminal conviction by age 24.
  • It’s Time to Talk About America’s Disorder Problem — A meta-analysis of 56 studies found that disorder policing consistently reduces crime, but that indiscriminate "aggressive order maintenance" arrests did not significantly reduce crime while problem-oriented strategies targeting specific sources of disorder often had sizable effects without spillovers. The authors note that a large share of disorder comes from a small number of people and places.

Friday, October 17, 2025

AI Summary. Capital-spending forecasts for the four largest cloud providers rose nearly 50% over the year, and AI data centers are increasingly funded through leveraged and off-balance-sheet structures, including $3.2bn in senior secured notes and a roughly $30bn asset-backed financing. The author argues this marks a speculative-finance phase where borrowers must roll over principal.

Paul Kedrosky Applied Complexity
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Kedrosky argues that a $3.2B junk bond issuance to fund a datacenter and a $30B SPV to finance a Meta datacenter campus place us in the “speculative finance” phase of a Minsky cycle, where firms can service interest but must roll over principal.

Is AI data center spending shifting toward leveraged, off-balance-sheet financing?

Core argument: 2026 capex forecasts for the top four hyperscalers alone grew almost 50% over the course of the year.

2026 capex forecasts for the top 4 hyperscalers alone grew almost 50% during the year, [which is] remarkable. There were two key events this week in our ongoing AI capex wave that are "unlocking" moments. TeraWulf is offering $3.2B in senior secured notes due in 2030 to fund expansion of its Lake Mariner data center. [Thus] we are now seeing elevated leverage and speculative financing in AI infrastructure. Meta and Blue Owl Capital have closed Project Hyperion, a roughly $30 billion financing for Meta’s new Louisiana data-center campus. Meta’s use of a multi-tranche, off-balance-sheet ABS signals a structural evolution from direct corporate borrowing to financialized infrastructure exposure. In terms of the Minsky cycle, we seem clearly in the “speculative finance” phase, where [borrowing firms] can service interest but must roll over principal. With increasing discussion of declining returns from GPU rentals, the pressures on cash flow to meet obligations will only grow in the mid-market. And the largest hyperscalers, seeing this, will continue to fund aggressive growth via new debt vehicles and hope to become the largest post-cycle players left standing.

Takeaways by Macro Roundup® AI

  1. 2026 capex forecasts for the top four hyperscalers alone grew almost 50% over the course of the year.
  2. TeraWulf is offering $3.2 billion in senior secured notes due 2030 to fund expansion of its Lake Mariner data center, which the author cites as evidence of elevated leverage and speculative financing in AI infrastructure.
  3. Meta and Blue Owl Capital closed Project Hyperion, a roughly $30 billion financing for Meta's new Louisiana data-center campus, whose multi-tranche off-balance-sheet asset-backed structure the author reads as a shift from direct corporate borrowing to financialized infrastructure exposure.

Related Articles:

  • The Godfather and Oracle’s Crap GPU Rental Returns — Oracle generated about $900m from renting servers powered by Nvidia chips over a three-month period and recorded $125m in gross profit, a 14% gross margin that is below those of many nontech retail businesses. The author argues data centers are a capital-intensive business with unimpressive margins.
  • Why AI Capex isn’t a Bubble: A Perez-ian Perspective — Carlota Perez's framework of technological revolutions casts heavy artificial-intelligence infrastructure spending as a late-stage installation surge, in which financial capital overshoots and builds capacity ahead of demand, leaving both losses and infrastructure for later productivity. The author argues this model is descriptive rather than prescriptive, and that executives and policymakers invoking it rationalize losses in advance and erode market discipline.
  • Why We Are Not In A Bubble….Yet — The 5 largest US technology companies are worth about 16% of the global public equity market, and the top 10 US stocks nearly 25%, almost $25tn. The author argues valuations are high but not bubble-level, with the "Magnificent 7" median forward price-to-earnings ratio at 27x, roughly half that of the late-1990s leaders.

AI Summary. Price data from RBC Capital Markets show average hourly rental rates for Nvidia's H200 and H100 graphics chips down 29% and 22% year-to-date, with smaller providers driving the declines. Prices charged by the largest cloud providers — Amazon Web Services, Microsoft Azure, Google and Oracle — have hardly moved, widening the gap between them and newer entrants.

Bryce Elder Financial Times
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GPU rental rates at the hyperscalers are relatively stable, while overall per-hour rates for Nvidia’s H200 and H100 chips are down 29% and 22%, respectively, year to date.

Are falling GPU rental prices driven by smaller providers, not hyperscalers?

Core argument: Per-hour rental rates for Nvidia's H200 and H100 GPUs are down 29% and 22% respectively year-to-date, according to price data collected by RBC Capital Markets.

[According to] price data collected by RBC Capital Markets average GPU pricing has been weak. For Nvidia’s H200 and H100 chips, per-hour rates are down 29% and 22% respectively in the year-to-date. What might be less obvious is that among the hyperscalers — Amazon’s AWS, Microsoft’s Azure, Google and Oracle — prices have hardly budged. The result is an ever-widening gap between rates charged by the big-four and a growing number of smaller rivals. Here’s the RBC data organised to show relative pricing across all GPUs. The iceberg effect shows how much new entrants are driving average rates lower. Meanwhile, for a hyperscaler customer, this month’s bill per GPU will almost always be the same as last month’s bill.

Takeaways by Macro Roundup® AI

  1. Per-hour rental rates for Nvidia's H200 and H100 GPUs are down 29% and 22% respectively year-to-date, according to price data collected by RBC Capital Markets.
  2. Prices charged by the four hyperscalers — Amazon's AWS, Microsoft's Azure, Google and Oracle — have hardly budged, so a hyperscaler customer's monthly bill per GPU is almost always the same as the prior month's.
  3. RBC's data show a widening gap between hyperscaler GPU rates and those of a growing number of smaller rivals, with new entrants driving average rates lower.

Related Articles:

  • The Godfather and Oracle’s Crap GPU Rental Returns — Oracle generated about $900m from renting servers powered by Nvidia chips over a three-month period and recorded $125m in gross profit, a 14% gross margin that is below those of many nontech retail businesses. The author argues data centers are a capital-intensive business with unimpressive margins.
  • 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 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.

AI Summary. The authors estimate that highly visible price changes in gasoline and food, along with broad-based inflation, accounted for about 4pp of the roughly 6pp post-pandemic spike in household inflation expectations, but explain less than 1pp of the most recent 8pp surge. They attribute the remaining roughly 7.5pp to unexplained factors, larger than the 0.8–2pp inflationary impact estimated for new tariffs.

Philippe Andrade and Michael Wicklein Federal Reserve Bank of Boston
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Spikes in “salient” food and gas prices, along with core CPI, explain ⅔ of the surge in post-pandemic inflation expectations in the Michigan Survey, but only 1pp of the recent 8pp surge, raising concerns that expectations are becoming unanchored.

Do visible price changes explain the recent surge in inflation expectations?

Core argument: Gasoline prices, food prices, and underlying inflation together contributed about 4pp of the 2021–2022 surge in household inflation expectations, with unexplained factors adding 2pp, so salient prices explain roughly two-thirds of that peak increase.

We look at the extent to which the usual association between salient prices and household inflation expectations explains the four inflation-expectation spikes since 1960 [and particularly] the extent to which the recent surge in inflation expectations reflects changes in salient prices. Figure 4 zooms in on the post-pandemic period. It shows that in 2021 and 2022, sharp increases in gasoline prices, food prices, and underlying inflation together contributed about 4pp to the surge, while unexplained factors contributed to 2pp. - i.e. about 2/3 of the period’s peak increase in inflation expectations can be explained by households observing changes in salient prices [on top of] increased broad-based inflation. By contrast, changes in the salient prices and underlying inflation explain little—less than 1pp—of the most recent surge, leaving about 7.5pp unexplained at the 8pp peak. Indeed, unexplained factors have played a much larger role than usual. This could be partly attributable to tariff-related price uncertainty, but remains far larger than the estimated inflationary impact .8 to 2pp that the new tariffs would imply. [Editor’s note: the quantitative extent of the overall surge in inflation expectation in 2025 appears unreasonable by almost any measure, though qualitatively it may convey an important signal.]

Takeaways by Macro Roundup® AI

  1. Gasoline prices, food prices, and underlying inflation together contributed about 4pp of the 2021–2022 surge in household inflation expectations, with unexplained factors adding 2pp, so salient prices explain roughly two-thirds of that peak increase.
  2. Salient prices and underlying inflation explain less than 1pp of the most recent inflation-expectations surge, leaving about 7.5pp of the 8pp peak unexplained, a larger unexplained role than usual.
  3. The unexplained portion of the recent surge could be partly attributable to tariff-related price uncertainty, but it remains far larger than the estimated 0.8–2pp inflationary impact the new tariffs would imply.

Related Articles:

  • Are We Heading For A New Inflation Surge? — The analysis finds post-pandemic headline and core inflation closely tracking the pattern of the early 1970s, with the spike in each case taking about three years to be brought under control and followed by roughly 18 months of relative stability. If the parallel holds, a renewed inflation flare-up would be expected.
  • What We Know About Rising Gold Prices — Gold prices have risen in a near-straight line even as the dollar held stable and the Federal Reserve turned more hawkish than expected, indicating the rally is not a flight out of the dollar specifically. The author argues it instead reflects a broader flight out of all major developed-market currencies, a "global debasement trade.
  • The Speed of Firm Response to Inflation — The authors estimate that a 1 percentage point increase in reported consumer price inflation is associated with a roughly 0.6 percentage point rise in firms' expectations for their own prices over the year ahead, with the effect appearing only after the inflation data is published.

AI Summary. Speculation now extends beyond stocks, bonds and property to crypto, valued at roughly $4tn, and sports betting, where Americans wagered $150bn in a year, up 24%, according to the American Gaming Association. Gold, traditionally a hedge against bubbles, itself looks bubbly, and working-class investors are flocking to these markets.

Greg Ip Wall Street Journal
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Citing the AI-related equity boom, crypto and the rise of sports betting, Greg Ip argues that “speculation has become woven into today’s political, economic and cultural psyche.”

Is speculation spreading beyond stocks into crypto, betting, and gold?

Core argument: Americans bet $150 billion on sports last year, up 24% from 2023, according to the American Gaming Association, while crypto, a brand new asset class, is now valued at some $4 trillion.

The speculative fever has spread well beyond the usual stocks, bonds and property. Crypto, a brand new asset class, is now valued at some $4 trillion. Americans bet $150 billion on sports last year, up 24% from 2023, according to the American Gaming Association. Gold, a hedge against bubbles, is looking bubbly itself. Speculation has become woven into today’s political, economic and cultural psyche. Working-class investors are flocking to all these markets: stocks, betting and crypto. They are beneficiaries of a new age of democratic finance. Or the last invitees to a party that’s going to end. The Fed has refilled the speculative party’s punch bowl. If Trump gets his way, the Fed could spike the punch bowl even more.

Takeaways by Macro Roundup® AI

  1. Americans bet $150 billion on sports last year, up 24% from 2023, according to the American Gaming Association, while crypto, a brand new asset class, is now valued at some $4 trillion.
  2. Speculative fever has spread beyond stocks, bonds and property to crypto, sports betting and gold, a hedge against bubbles that is itself looking bubbly.
  3. The Federal Reserve has refilled the speculative party's punch bowl and could spike it further if Trump gets his way, as working-class investors flock to stocks, betting and crypto.

Related Articles:

  • Why We Are Not In A Bubble….Yet — The 5 largest US technology companies are worth about 16% of the global public equity market, and the top 10 US stocks nearly 25%, almost $25tn. The author argues valuations are high but not bubble-level, with the "Magnificent 7" median forward price-to-earnings ratio at 27x, roughly half that of the late-1990s leaders.
  • What If The AI Stockmarket Blows Up? — Total annual revenue from AI at the West's leading AI firms is estimated at $50bn, less than 2% of the $2.9tn in global data-centre investment Morgan Stanley forecasts over a four-year period, excluding energy costs. The average American tech firm's assets are estimated to last nine years, versus 15 for 1990s telecoms assets.
  • Life Under Two: Debt, Deficits, and the AI Discontinuity — The United States averaged annual GDP growth above 3% for decades, but 2% or less is now more likely. Over ten years, the author estimates that gap amounts to a $3.36tn larger economy, $3.7tn more tax revenue, and 6m more jobs, shifting public psychology from abundance toward scarcity.

AI Summary. Survey data show 43% of U.S. adults say legalized sports betting is a bad thing for society, up from 34% three years earlier, and 40% say it is bad for sports, up from 33%. The largest shift came among men under 30, 47% of whom now call it bad for society versus 22% earlier.

John Gramlich Pew Research Center
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43% of American adults say widespread betting on sports is “a bad thing for society,” up from 34% in 2022. 47% of men under 30 say legal sports betting is bad for society, up from 22% in 2022.

Are Americans turning against legal sports betting?

Core argument: 43% of U.S. adults say the legality of sports betting in much of the country is a bad thing for society, up from 34% in 2022.

Today, 43% of U.S. adults say the fact that sports betting is now legal in much of the country is a bad thing for society. That’s up from 34% in 2022. And 40% of adults now say it’s a bad thing for sports, up from 33%. The biggest shifts in attitudes about sports betting’s societal impact have come among young Americans – especially young men. Today, 47% of men under 30 say legal sports betting is a bad thing for society, up from 22% who said this in 2022. Women under 30 have also become more likely to express this view: 35% see legal sports betting as bad for society, up from 25% three years ago.

Takeaways by Macro Roundup® AI

  1. 43% of U.S. adults say the legality of sports betting in much of the country is a bad thing for society, up from 34% in 2022.
  2. Among men under 30, 47% call legal sports betting a bad thing for society, up from 22% in 2022, while women under 30 rose from 25% to 35%.
  3. 40% of U.S. adults say legal sports betting is a bad thing for sports, up from 33%.

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AI Summary. China has dismissed its second-most senior general — a vice chairman of the Communist Party's top military decision-making body and Politburo member — along with eight other high-ranking officers, citing severe disciplinary violations and abuses of power. The ousted general was a protégé handpicked by China's leader.

Chun Han Wong Wall Street Journal
Date Posted:

China’s second most senior military officer and eight other high-ranking officers have been arrested for “severe violations of party discipline” and “serious duty-related crimes.”

Is China expanding its purge of top military leadership?

Core argument: China has purged Gen. He Weidong and eight other high-ranking military commanders, as Xi Jinping escalates a crackdown on corruption and disloyalty in the armed forces.

China has purged its second-most senior general and eight other high-ranking military commanders, as leader Xi Jinping dials up a crackdown on corruption and disloyalty in the armed forces with the ouster of a handpicked protégé. Gen. He Weidong, the lower-ranking of two vice chairmen on the Communist Party’s top military decision-making body and a member of the 24-man Politburo, has been dismissed from the party and the military for severe disciplinary violations and abuses of power, a spokesman for China’s Defense Ministry said. The party also purged eight other senior officers.

Takeaways by Macro Roundup® AI

  1. China has purged Gen. He Weidong and eight other high-ranking military commanders, as Xi Jinping escalates a crackdown on corruption and disloyalty in the armed forces.
  2. Gen. He Weidong, the lower-ranking of two vice chairmen on the Communist Party's top military decision-making body and a member of the 24-man Politburo, was dismissed from the party and military for severe disciplinary violations and abuses of power, according to a Chinese Defense Ministry spokesman.
  3. The ouster of Gen. He Weidong, China's second-most senior general, removes a protégé handpicked by Xi Jinping.

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