Edward Conard

Top Ten New York Times Bestselling Author

  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “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
  • “…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 offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “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 must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Wednesday, October 22, 2025

AI Summary. A slowdown in housing supply growth has weighed on affordability, with the share of housing stock available for sale or rent below its historical average, implying a gap between supply and demand. The analysis estimates that restoring affordability would require roughly 3–4mn additional units, or 2–2.6% of current stock, with California and Florida facing the largest shortages.

Elsie Peng and Pierfrancesco Mei Goldman Sachs
Date Posted:
Is Database:
Database

A Goldman analysis suggests restoring housing affordability to late 1990s levels will require construction of 3–4mm new units, equivalent to 2–2.6% of the current housing stock.

How many additional housing units would restoring affordability require?

Core argument: The authors estimate that fixing the U.S. housing shortage and restoring affordability requires roughly 3–4mn additional housing units, equal to 2–2.6% of the current housing stock.

A sharp and prolonged slowdown in the growth of housing supply following the 2007-09 Great Recession has weighed on affordability. The share of total housing stock available for sale or rental is now below its historical average, which implies a gap between supply and demand. Our analysis suggests that fixing the shortage and restoring affordability will require around 3–4mn additional housing units, or 2-2.6% of the current housing stock. Among states, we find that California and Florida have the largest shortages. Other studies estimate the national housing shortfall to be around 1.5-5.5mn units, or 1-3.7% of the current housing stock. While it is hard to directly compare some of these estimates to ours because they used different assumptions and reference points for affordability, their median estimate is broadly in line with our findings.

Takeaways by Macro Roundup® AI

  1. The authors estimate that fixing the U.S. housing shortage and restoring affordability requires roughly 3–4mn additional housing units, equal to 2–2.6% of the current housing stock.
  2. A sharp and prolonged slowdown in housing supply growth after the 2007–09 Great Recession has weighed on affordability, with the share of total housing stock available for sale or rental now below its historical average.
  3. The analysis finds California and Florida have the largest state-level housing shortages, while other studies estimate the national shortfall at 1.5–5.5mn units, or 1–3.7% of the current housing stock, with a median broadly in line with the authors' findings.

Related Articles:

  • Inflation Adjusted House Prices 2.7% Below 2022 Peak — Inflation-adjusted US house prices are 2.7% below their 2022 peak. An affordability index built from median income, a 15% down payment, and 30-year fixed mortgage rates shows the monthly principal-and-interest payment on a $500,000 house rose 94% over four years as prices climbed 24% and mortgage rates went from 2.87% to 6.72%.
  • America’s Housing Affordability Crisis and the Decline of Housing Supply — Housing production intensity has fallen substantially, especially in fast-growing Sunbelt markets once known for building, converging toward the low rates long seen on the coasts and in declining industrial centers. The authors argue incumbent-controlled regulation explains the weakening link between high prices, high demand areas, and new construction.
  • The Price of Housing in the United States — Real housing price appreciation in the United States has varied widely across regions, with West Coast cities rising earlier while prices in other regions remained comparable in real terms to decades earlier. The authors find essentially no relationship between real price growth and zoning restrictiveness in the earliest period studied, and progressively steeper gradients in later periods.

AI Summary. The business hiring rate is very low by historical standards, not far above its level during the 2008-2009 financial crisis, and private job-postings data suggest the picture is getting worse. Consumer survey responses show a narrow 8-point gap between those saying jobs are plentiful and hard to get, while long-term unemployment has soared.

Paul Krugman Krugman Wonks Out
Date Posted:

Non-government layoffs are not high, but business hiring is not far above its level during the 2008–2009 financial crisis. The number of labor market participants unemployed for more than 27 weeks rose from 1.45mm to 1.95mm between May and August 2025.

Is the labor market weaker than headline unemployment suggests?

Core argument: The Conference Board's spread between respondents saying jobs are "plentiful" versus "hard to get" narrowed to 8 points (27 versus 19), down from roughly 40 points in late 2019 before Covid.

The rate at which businesses are hiring is very low by historical standards, not far above its level during the 2008-2009 financial crisis. These data aren’t currently being updated because of the government shutdown, but we get a more up-to-date picture from private sources, such as job postings from Indeed.com, and they suggest that the picture is, if anything, getting worse. The influential monthly consumer survey conducted by the Conference Board asks people whether jobs are “plentiful” or “hard to get.” In late 2019, on the eve of Covid, almost half of respondents said jobs were plentiful, versus around 10% saying hard to get — a spread of around 40 points. In the latest Conference Board survey the spread was only 8 points, 27 versus 19. This tells us that American workers are very worried that if they should happen to lose their job, they’ll have a hard time finding another. And they’re right. Overall unemployment hasn’t risen that much, but the number of long-term unemployed — would-be workers who have been jobless for more than 6 months — had soared as of August, and has probably continued to rise since then.

Takeaways by Macro Roundup® AI

  1. The Conference Board's spread between respondents saying jobs are "plentiful" versus "hard to get" narrowed to 8 points (27 versus 19), down from roughly 40 points in late 2019 before Covid.
  2. The U.S. business hiring rate is very low by historical standards, not far above its level during the 2008–2009 financial crisis, and Indeed.com job postings suggest the picture is getting worse.
  3. The number of Americans jobless for more than six months had soared as of August even as overall unemployment rose little, while the government shutdown has halted updates to official hiring data.

Related Articles:

  • Jobless Growth — Labor demand growth may be too weak to keep pace with even modest labor supply growth: the labor market is somewhat weaker than before the pandemic, job growth has turned negative outside healthcare, and firms are focused on using AI to cut labor costs. Economists estimate most employment losses in routine manual occupations since the 1970s occurred during recessions.
  • 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.
  • Honey, AI Capex Keeps Eating … Everything — The author estimates that AI-related capital spending contributed between 0.6% and 1.3% of a quarter's 3% U.S. GDP growth, based on information technology equipment and intellectual property investment data. Google, Amazon, Meta, and Microsoft alone spent about $69bn in the quarter, roughly half of all information technology equipment spending on an annualized basis.

AI Summary. Amazon's automation team expects robotics to let the company avoid hiring more than 160,000 U.S. workers it would otherwise need by 2027, saving about 30 cents per item picked, packed and delivered. Executives hope to keep the U.S. workforce flat even while selling twice as many products by 2033.

Karen Weise New York Times
Date Posted:

The New York Times reports that Amazon’s automation team expects the company can avoid hiring more than 160,000 workers it would otherwise need in the US by 2027 due to increased automation.

Can robots let a retailer double sales without adding workers?

Core argument: Amazon's automation team expects robotics to let the company avoid hiring more than 160,000 U.S. workers it would otherwise need by 2027, saving about 30 cents on each item picked, packed and delivered.

Amazon’s U.S. workforce has more than tripled since 2018 to almost 1.2 million. But Amazon’s automation team expects the company can avoid hiring more than 160,000 people in the United States it would otherwise need by 2027. That would save about 30 cents on each item that Amazon picks, packs and delivers to customers. Executives told Amazon’s board last year that they hoped robotic automation would allow the company to continue to avoid adding to its U.S. workforce in the coming years, even though they expect to sell twice as many products by 2033. That would translate to more than 600,000 people whom Amazon didn’t need to hire.

Takeaways by Macro Roundup® AI

  1. Amazon's automation team expects robotics to let the company avoid hiring more than 160,000 U.S. workers it would otherwise need by 2027, saving about 30 cents on each item picked, packed and delivered.
  2. Amazon executives told the company's board that they hoped robotic automation would let Amazon avoid adding to its U.S. workforce in coming years even while selling twice as many products by 2033, equating to more than 600,000 people not hired.
  3. Amazon's U.S. workforce has more than tripled since 2018 to almost 1.2 million.

Related Articles:

  • Amazon Is on the Cusp of Using More Robots Than Humans in Its Warehouses — Amazon employs about 1.56m people overall and is approaching having more robots than human workers in its warehouses, with robots supplanting some employees and helping slow hiring. A Wall Street Journal analysis estimates its average employees per facility fell to roughly 670, a 16-year low, while packages shipped per employee rose from about 175 in 2015 to about 3,870.
  • 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. Research by Bloomberg Intelligence estimates that $7.7tn of the $20tn in US economic growth since 2000 is spending to recover from or prepare for disasters, reaching nearly $1tn in a recent 12-month span versus a 1990s annual average closer to $80bn in current dollars.

Eric Roston Bloomberg
Date Posted:

The US spent just under $1T in the 12 months ending in June on “recovering from or preparing for disasters,” according to a Bloomberg analysis. During the 1990s, the annual average was only $80B in current dollars.

How much of US economic growth comes from disaster spending?

Core argument: Bloomberg Intelligence senior analyst Andrew John Stevenson estimates about $7.7 trillion of the $20 trillion increase in US GDP since 2000 — to $29 trillion last year — is spending related to recovering from or preparing for disasters.

The US is now always paying to recover from disasters, and this is contributing a larger and larger share of GDP growth. The US economy has grown by $20 trillion since 2000, to $29 trillion last year. About $7.7 trillion of that is spending related to recovering from or preparing for disasters, according to research by Andrew John Stevenson, a senior analyst at Bloomberg Intelligence. The country spent almost $1 trillion in the 12 months ending in June. In the 1990s, the annual average was closer to $80 billion in current dollars. The money goes to insurers and waste haulers, power grid equipment manufacturers and engineering contractors, hardware stores and self-storage facilities. Stevenson created [the Prepare and Repair Index] a set of about 100 large public companies across many sectors that together outperformed the S&P 500 by 6.5% a year from October 2015 to October 2025.

Takeaways by Macro Roundup® AI

  1. Bloomberg Intelligence senior analyst Andrew John Stevenson estimates about $7.7 trillion of the $20 trillion increase in US GDP since 2000 — to $29 trillion last year — is spending related to recovering from or preparing for disasters.
  2. US disaster-related spending reached almost $1 trillion in the 12 months ending in June, against an annual average closer to $80 billion in current dollars in the 1990s, according to Stevenson's research.
  3. Stevenson's Prepare and Repair Index of about 100 large public companies across many sectors outperformed the S&P 500 by 6.5% a year from October 2015 to October 2025.

Related Articles:

  • Runaway Insurance Costs Bring Back Talk of Price Caps — State regulators have approved home insurance rate increases averaging 50% and auto increases averaging 42%, outpacing a 26% rise in consumer prices over the same period, according to S&P Global Market Intelligence and Labor Department data.
  • Insurance: Climbing Costs Cut Into Consumer Budgets — Bank of America internal data show median household property insurance payments (auto and home) rose 6% year-over-year and more than 40% over five years, lifting such payments to 5% of income. Younger generations saw the largest increases, though Gen X payments also rose 45%.
  • The World Is Getting Riskier. Americans Don’t Want to Pay for It — Americans' resistance to paying to insure against risks from illness, old age, and natural and financial disasters is growing alongside those risks; JPMorgan estimated wildfires around Los Angeles caused $50bn in losses, of which only $20bn were insured. Socializing risk removes the price signal that encourages the insured to mitigate their own exposure.

AI Summary. China is a key driver of rising gold prices through central bank purchases, arbitrage trading, and greater speculative and safe-haven buying by households. Higher business uncertainty in the US is also pushing gold prices up.

Torsten Sløk Apollo
Date Posted:

Citing a rise in gold stock levels in Chinese warehouses, central bank purchases, and increased safe-haven demand from Chinese households, Torsten Sløk argues China is playing a key role in the rise of gold prices.

Is China driving the rise in gold prices?

Core argument: China is playing a key role in the rise in gold prices through central bank purchases, arbitrage trading, and increased speculative and safe-haven demand by Chinese households.

China is playing a key role in the ongoing rise in gold prices because of central bank purchases, arbitrage trading, and increased speculative and safe-haven demand by households. Higher business uncertainty in the US is also pushing gold prices up.

Takeaways by Macro Roundup® AI

  1. China is playing a key role in the rise in gold prices through central bank purchases, arbitrage trading, and increased speculative and safe-haven demand by Chinese households.
  2. Higher business uncertainty in the United States is also pushing gold prices up.

Related Articles:

  • Gold Slumps Most in 12 Years as Record-Breaking Rally Cools — Gold fell as much as 6.3% after reaching a record $4,381.52 an ounce, its largest drop in 12 years, following a weeks-long rally to successive highs. Contributing factors included positive US-China trade talks, a stronger dollar, overstretched technical indicators, and the end of a seasonal buying period in India.
  • 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. Bird flu has killed nearly 7m farmed birds in the United States in recent months, including about 1.3m turkeys, pressuring the nation's turkey supply. The virus has affected more than 180m farmed birds, spread to over 1,000 dairy herds across 18 states, and infected at least 70 people, mostly farmworkers.

Emily Anthes and Apoorva Mandavilli New York Times
Date Posted:

Bird flu is surging in part due to the fall migration, resulting in the deaths of almost 7mm farmed birds in the US since the start of September.

How widely has bird flu spread across poultry, cattle, and people?

Core argument: Bird flu has killed nearly seven million farmed birds in the United States since the beginning of September, including about 1.3 million turkeys, putting pressure on the nation's turkey supply ahead of Thanksgiving.

After a quiet summer, the virus has hit dozens of poultry flocks, resulting in the deaths of nearly seven million farmed birds in the United States since the beginning of September. Among them: about 1.3 million turkeys, putting pressure on the nation’s turkey supply in the run-up to Thanksgiving. Reports of infected wild birds have also surged this fall, and three states — Idaho, Nebraska and Texas — have identified outbreaks in dairy cows. Since early 2022, the virus has affected more than 180 million farmed birds and killed countless wild ones. But it has also infected dozens of new species, suggesting that it has changed significantly over time. In early 2024, it spilled over into dairy cows, eventually spreading to more than 1,000 herds in 18 states. And it has infected at least 70 people, mostly farmworkers, resulting in several hospitalizations and one death.

Takeaways by Macro Roundup® AI

  1. Bird flu has killed nearly seven million farmed birds in the United States since the beginning of September, including about 1.3 million turkeys, putting pressure on the nation's turkey supply ahead of Thanksgiving.
  2. Since early 2022, the virus has affected more than 180 million farmed birds and infected dozens of new species, suggesting it has changed significantly over time.
  3. Bird flu spilled over into dairy cows in early 2024 and spread to more than 1,000 herds in 18 states, and it has infected at least 70 people, mostly farmworkers, resulting in several hospitalizations and one death.

Related Articles:

Thursday, October 23, 2025

AI Summary. The global investable asset universe is estimated at $261tn, or 200% of world GDP, with shifting asset weights tied to macro trends. The authors argue value-weighted global benchmarks have seldom been optimal for any particular investor, as they forgo diversification from smaller assets and performance varies across macro regimes.

Christian Mueller-Glissmann, Andrea Ferrario, Alessandro Giglio and Peter Oppenheimer Goldman Sachs
Date Posted:
Is Database:
Database
Is Important:
Important

The global stock of investable assets is valued at $261T, or ~ 200% of world GDP, up from ~75% in the 1990s. The weight of equity relative to bonds is higher than it was post-GFC, but below 1990s levels.

Are value-weighted global benchmarks optimal for individual investors?

Core argument: The authors estimate the World Portfolio of all investable assets globally at $261tn, or 200% of world GDP, and construct a long-term proxy back to 1950 plus an investable index since 1990.

The World Portfolio is the sum of all investable assets globally, which we currently estimate to be [$261T], or 200% of world GDP. We create two versions of the World Portfolio: (1) a long-term proxy since 1950 using monthly data for a reconstructed, historical universe of global equities and bonds (mostly sovereign) and Gold, and (2) an investable index since 1990 using mostly daily data for a universe comprising benchmark indices for global equities, sovereign bonds, credit, real estate, private markets, cryptocurrencies and Gold. [Editor's Note: All figures shown here, excluding Exhibit 1, use the second measure]. Persistent shifts in asset weights are often closely linked to macro trends, like inflation boosting gold relative to equity and bond markets during the 1970s, or equity bubbles like the Tech Bubble during the late 1990s. Currently there are three major trends visible: (1) the equity weight relative to bonds has increased materially since the GFC but it remains below levels from the 1990s, (2) both in equities and bonds the US has accrued a larger weight and is very dominant and (3) alternatives such as private markets, Gold and cryptocurrencies have grown relative to public equities and bonds (but remain relatively small). Benchmarks like the World Portfolio are a major influence on investors' asset allocations. However, following benchmarks is not necessarily a good idea – even over longer horizons the World Portfolio has seldom been optimal [for any particular investor] and performance varied materially with structural macro regimes. Value-weighted benchmarks miss out on diversification benefits from smaller assets and, while US asset dominance was a tailwind in recent years, regional performance varied historically.

Takeaways by Macro Roundup® AI

  1. The authors estimate the World Portfolio of all investable assets globally at $261tn, or 200% of world GDP, and construct a long-term proxy back to 1950 plus an investable index since 1990.
  2. The equity weight relative to bonds has risen materially since the global financial crisis but remains below 1990s levels, while the US has accrued a dominant weight in both global equities and bonds.
  3. The World Portfolio has seldom been optimal for any particular investor, with performance varying materially across structural macro regimes and value-weighted benchmarks missing diversification benefits from smaller assets.

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.
  • 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. Regulatory data on hedge funds indicate Cayman Islands funds purchased a net $1.2tn of U.S. Treasury securities over a two-year period, corresponding to a surge in cash-futures "basis trade" positions. If entirely notes and bonds, those purchases absorbed 37% of net issuance, matching all other foreign investors combined, making the Cayman Islands the largest foreign holder.

Daniel Barth, Daniel Beltran, Matthew Hoops, Jay Kahn, et al. Federal Reserve Board
Date Posted:

After adjusting Treasury data for an estimated undercount of ~$1.4T suggested by regulatory data, a Federal Reserve analysis finds hedge funds domiciled in the Cayman Islands are, increasingly, the marginal foreign buyers of Treasury notes and bonds.

How much Treasury issuance have offshore hedge funds absorbed?

Core argument: Assuming those purchases were entirely Treasury notes and bonds, Cayman Islands hedge funds absorbed 37% of net note and bond issuance, matching the amount absorbed by all other foreign investors combined.

Recent regulatory data collections on hedge funds [in particular Form PF] indicate a massive increase in Cayman Islands hedge fund exposures to U.S. Treasury securities over the last two years. [This] corresponds to a surge in hedge funds' Treasury cash-futures basis trade positions [the "basis trade," where a trader simultaneously buys a U.S. Treasury security in the cash market and sells short a corresponding Treasury futures contract to profit from the price difference between the two instruments]. Combining various data sources, [we find that] btw Jan. 2022 and Dec. 2024, a time when the Fed was allowing roll off of maturing Treasuries, Cayman Islands hedge funds purchased, on net, $1.2 trillion of these securities. Assuming these purchases comprised entirely Treasury notes and bonds, they absorbed 37% of net bond and note issuance, the same amount as all other foreign investors combined. The Cayman Islands is in fact the largest foreign holder of U.S. Treasury securities—holding significantly more than China, Japan, and the United Kingdom, the largest 3 holders currently displayed in Treasury's "Major Foreign Holders" table.

Takeaways by Macro Roundup® AI

  1. Assuming those purchases were entirely Treasury notes and bonds, Cayman Islands hedge funds absorbed 37% of net note and bond issuance, matching the amount absorbed by all other foreign investors combined.
  2. The Cayman Islands is the largest foreign holder of U.S. Treasury securities, holding significantly more than China, Japan, and the United Kingdom, the three largest holders shown in Treasury's "Major Foreign Holders" table.

Related Articles:

  • JPMorgan Is Worried About Who’s Going to Buy All the Bonds — JPMorgan analysts estimate that the Federal Reserve's Treasury holdings have fallen $180bn as it pursues quantitative tightening, while commercial banks' holdings are down $60bn and foreign official holdings down $50bn. The analysts describe simultaneous negative demand from all three buyer types as rare and say they remain concerned about the lack of structural demand for Treasuries.
  • 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.
  • Why Microsoft Has Lower Borrowing Costs Than the U.S. — Two AAA-rated Microsoft bonds trade at yields slightly below equivalent U.S. Treasurys, an unusual negative spread given that companies are more likely to default than a government able to tax and that corporate bonds are harder to sell. Demand for high-quality corporate debt has compressed the AAA corporate spread to 0.3 percentage point over Treasurys.

AI Summary. China's producer price inflation for durable consumer goods — the category most exposed to US tariffs — dropped sharply alongside the imposition of substantial US tariffs, consistent with exporters marking down prices to sell goods at home. Because limited warehouse capacity forces exporters to keep goods moving, discounting to generate new demand cuts into their profitability.

Robin Brooks Robin Brooks Substack
Date Posted:

Producer prices for durable consumer goods had fallen 3.9% y/y in China as of September. Brooks argues that, given the importance of exports to the Chinese, American tariffs are helping to entrench deflation in China.

Are US tariffs pushing Chinese exporters to discount prices at home?

Core argument: China's year-over-year producer price inflation for durable consumer goods dropped sharply as substantial US tariffs took effect in 2025, consistent with exporters marking down prices to sell goods domestically.

The chart shows year-over-year producer price inflation for consumer goods (black line) and for durable consumer goods (blue line), which are most likely to have been impacted by US tariffs. The imposition of substantial US tariffs in 2025 overlaps with a sharp drop in producer price inflation for the latter category, consistent with the idea that exporters are marking down prices in an attempt to sell goods at home. The bottom line is that China’s exporters are hurting. Just-in-time manufacturing means warehouse capacity is limited, so it’s important to keep goods moving. The only way to do that in the face of the tariff shock, which makes it much harder to sell in the US, is to discount and thereby generate new demand abroad and domestically. That’s a negative shock to the profitability of China’s exporters.

Takeaways by Macro Roundup® AI

  1. China's year-over-year producer price inflation for durable consumer goods dropped sharply as substantial US tariffs took effect in 2025, consistent with exporters marking down prices to sell goods domestically.
  2. Just-in-time manufacturing leaves Chinese exporters with limited warehouse capacity, so discounting to generate new demand at home and abroad is the only way to keep goods moving under the tariff shock.
  3. Discounting in the face of US tariffs is a negative shock to the profitability of China's exporters.

Related Articles:

  • China’s Youth Unemployment Soars To 2-Year High As Job Crunch Deepens — China's urban unemployment rate for 16- to 24-year-olds excluding students rose to 18.9% from 17.8%, the highest since the National Bureau of Statistics revised its calculation method for the series. A record 12.2m university students graduated into a job market strained by deflationary pressures and external uncertainties, with many struggling to find roles matching their education and skills.
  • Xi Overcapacity Fight Leaves Economy Vulnerable Without Stimulus — China's total debt has risen to over 300% of gross domestic product from a little over 200% a decade ago, and with the main policy rate at 1.4%, the central bank has limited room to cut. Price declines are more widespread than in past deflationary episodes, and large-scale stimulus remains off the table.
  • China Criticises Manufacturers Over Price War As Deflation Fears Mount — Chinese producer prices have been in deflationary territory since September 2022, and Chinese leaders have used state and party media to criticise "involution", or excessive price competition among manufacturers. The statements suggest Beijing is wary that rising industrial output alongside weak domestic consumer demand is entrenching deflation and straining relations with major trading partners.

AI Summary. Data published in Nature show U.S. nuclear construction costs rose steeply after the 1960s while China's fell by half during the 2000s and have since stabilized. China's nuclear companies repeatedly build only a handful of reactor designs, which analysts say streamlines licensing, simplifies supply chains, and is essential for scaling efficiently.

Brad Plumer and Harry Stevens New York Times
Date Posted:
Is Database:
Database

The cost per watt of the newest nuclear plants in the US is $15, relative to $1.67-$2.58 per watt for Chinese nuclear plants under construction. Since 2013, the US has built two new nuclear reactors while China has built 13 and has 33 underway.

Does repeatedly building the same reactor designs lower nuclear construction costs?

Core argument: Chinese nuclear construction costs fell by half during the 2000s and have since stabilized, while U.S. costs rose sharply after the 1960s, according to data published in Nature.

While U.S. nuclear construction costs skyrocketed after the 1960s, they fell by half in China during the 2000s and have since stabilized, according to data published recently in Nature. (The only two U.S. reactors built this century, at the Vogtle nuclear plant in Waynesboro, Ga., took 11 years and cost $35 billion.) China’s nuclear companies build only a handful of reactor types and they do it over and over again. That allows developers to perfect the construction process and is “essential for scaling efficiently,” said Joy Jiang, an energy innovation analyst at the Breakthrough Institute, a pro-nuclear research organization. “It means you can streamline licensing and simplify your supply chain.”

Takeaways by Macro Roundup® AI

  1. Chinese nuclear construction costs fell by half during the 2000s and have since stabilized, while U.S. costs rose sharply after the 1960s, according to data published in Nature.
  2. The only two U.S. reactors built this century, at the Vogtle plant in Waynesboro, Ga., took 11 years and cost $35 billion.
  3. China's nuclear companies build only a handful of reactor types repeatedly, an approach Joy Jiang of the Breakthrough Institute calls "essential for scaling efficiently" because it lets developers streamline licensing and simplify the supply chain.

Related Articles:

  • Heliocentrism — An energy use must be electrified before green grid electricity can decarbonize it, and while US grid decarbonization continues at a steady pace, the electricity share of final US energy consumption has grown little. Transmission line growth runs well below Department of Energy targets for 2030 and 2035, and transformer delivery times have stretched from 4–6 weeks to 2–3 years.
  • Nuclear Power Is Hard. A Climate-Minded Billionaire Wants to Make It Easier — Start-up TerraPower has begun building a sodium-cooled nuclear reactor designed to be smaller and cheaper than conventional water-cooled plants, with completion expected no earlier than 2030 and the design not yet approved by the Nuclear Regulatory Commission. The company says the reactors should ultimately generate electricity at half the cost of traditional nuclear plants.
  • Plant Vogtle Unit 4 Begins Commercial Operation — The 1,114-megawatt Unit 4 reactor at Georgia's Plant Vogtle entered commercial operation, completing an 11-year expansion that brings the plant's capacity to nearly 5 gigawatts and makes it the largest US nuclear plant. No nuclear reactors are currently under construction in the United States, where nuclear supplies about 19% of electricity.

AI Summary. Google says its "Quantum Echoes" algorithm, run on its Willow quantum chip and detailed in a paper in Nature, is verifiable on other quantum computers and ran 13,000x faster than the world's best classical supercomputer. Google says the advance points to useful quantum applications in medicine and materials science within five years.

Isabella Ward Bloomberg
Date Posted:

Google claims it successfully ran an algorithm on “Willow,” its quantum computing chip. The breakthrough “clears a path for useful applications of quantum technology within five years.”

Is quantum computing nearing useful real-world applications?

Core argument: Google said its "Quantum Echoes" algorithm ran 13,000 times faster on the Willow quantum chip than would be possible on the world's best supercomputer, in results detailed in a paper published in Nature.

Google ran an algorithm on its “Willow” quantum-computing chip that can be repeated on similar platforms and outperform classical supercomputers, a breakthrough it said clears a path for useful applications of quantum technology within five years. The “Quantum Echoes” algorithm, detailed in a paper published in Nature, is verifiable, meaning it can be repeated on another quantum computer. It also ran 13,000 times faster than possible on the world’s best supercomputer, Google said. Taken together, the advances point to a broad range of potential uses in medicine and materials science, Google said.

Takeaways by Macro Roundup® AI

  1. Google said its "Quantum Echoes" algorithm ran 13,000 times faster on the Willow quantum chip than would be possible on the world's best supercomputer, in results detailed in a paper published in Nature.
  2. Google described the Quantum Echoes algorithm as verifiable, meaning it can be repeated on another quantum computer.
  3. Google said the advances clear a path to useful applications of quantum technology within five years, with potential uses in medicine and materials science.

Related Articles:

  • IBM Has a Roadmap to a ‘Fault-Tolerant’ Quantum Computer by 2029 — IBM has laid out a roadmap for building a fault-tolerant quantum computer by 2029, citing advances in reducing errors in quantum bits and a technique for identifying and correcting errors in real time using conventional computing. Amazon and Google are also pursuing quantum error correction with dedicated chips.
  • Physicists Question Microsoft’s Quantum Claim — Physicists outside the work have responded cautiously to Microsoft's topological quantum computing claim, noting that the search for topological qubits and the "Majorana" particles underpinning them has a history of bold announcements later withdrawn. Researchers describe the technology as excruciatingly difficult to actually build.
  • Microsoft’s Majorana 1 Chip Carves New Path for Quantum Computing — Microsoft unveiled Majorana 1, a quantum chip built on a Topological Core architecture using a new materials stack of indium arsenide and aluminum, which the company expects will enable quantum computers capable of solving industrial-scale problems within years rather than decades. The topological superconductor produces a qubit that is fast, small, stable, and digitally controlled.

AI Summary. In the United States, falling birth rates have accompanied a decline in religious participation, with the share of Americans attending worship services weekly falling from 42% to 30% over 20 years, according to Gallup. Survey data show 68% of Americans in their mid-70s or older attended weekly services in childhood, versus 48% of those in their early 20s.

Daniel Cox American Storylines
Date Posted:
Is Database:
Database

Among religious Americans aged 18–39, 57% and 66% of women and men, respectively, report wanting children someday, compared to 33% and 31% of their non-religious peers.

Does declining religious participation help explain falling US birth rates?

Core argument: The share of Americans attending worship services weekly fell from 42% to 30% over the last 20 years, according to Gallup, a decline that has accompanied falling U.S. birth rates.

Declining fertility rates are probably not attributable to a single cause, but in the United States, there is a strong connection to one of the defining cultural trends of the 21st century—the collapse of religious participation. In the U.S., falling birth rates have accompanied a dramatic decline in formal religious participation. Over the last 20 years, the percentage of Americans attending worship services weekly fell from 42% to 30%, according to a recent Gallup report. These trends have transformed adolescent experiences and their exposure to religious values. Pew’s 2024 Religious Landscape Study found that more than two-thirds (68%) of Americans now in their mid-70s or older attended services at least weekly during their childhood compared with less than half (48%) of those currently in their early 20s. The generational gap in formal religious education is even wider.

Takeaways by Macro Roundup® AI

  1. The share of Americans attending worship services weekly fell from 42% to 30% over the last 20 years, according to Gallup, a decline that has accompanied falling U.S. birth rates.
  2. Pew's 2024 Religious Landscape Study found 68% of Americans now in their mid-70s or older attended services at least weekly during childhood, compared with 48% of those in their early 20s.
  3. Declining fertility rates are probably not attributable to a single cause, but in the United States there is a strong connection to the collapse of formal religious participation.

Related Articles:

  • 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.
  • An Update to the Demographic Outlook, 2025 to 2055 — The Congressional Budget Office projects U.S. population growth averaging 0.2% per year through 2055, less than one-fifth the 0.9% annual average from 1975 to 2024. Deaths are projected to exceed births beginning in 2031, with net immigration more than accounting for population growth from 2031 to 2055.
  • The Case for Gradual Population Decline — 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.