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
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…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 represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “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
  • “…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 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, December 1, 2025

AI Summary. Declines in U.S. college enrollment are concentrated in community colleges, with four-year institutions maintaining stable enrollments and over one-third of the apparent community college drop stemming from administrative reclassification. The authors estimate that stronger labor markets explain 60% of the community college enrollment decline over 2009-19.

Joshua Goodman and Joseph Winkelmann National Bureau of Economic Research
Date Posted:
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First-time undergraduate enrollment in public 4-year colleges has ~ doubled since 1990. In public 2-year and for-profit institutions, enrollment has ~ halved. Stronger labor markets explain 60% of the drop in enrollment in two-year colleges.

Do stronger labor markets explain falling community college enrollment?

Core argument: Strengthening labor markets explain 60% of the decline in U.S. community college enrollment from 2009–19 and nearly 50% of the decline through 2023, according to the authors.

We demonstrate that widely discussed declines in U.S. college enrollment reflect patterns concentrated in community colleges rather than a broad crisis in higher education. We show that: four-year institutions have maintained stable enrollments; over one-third of apparent community college declines stem from administrative reclassification; community college enrollments are strongly countercyclical; strengthening labor markets explain 60% of the community college enrollment decline from 2009-19 (and nearly 50% of the decline through 2023); and students on the margin between community college enrollment and employment appear unlikely to complete a degree. Figure 3 overlays six decades of first-time enrollment data with gray bars indicating years when the national unemployment rate was increasing. Of the last six such recessionary periods, all but the most recent pandemic-related rise in unemployment show local maxima in community college enrollments. Unemployment rates seem less clearly related to enrollments in public four-year colleges over this time period, or to enrollment in private four-year and for-profit colleges during the last three decades.

Takeaways by Macro Roundup® AI

  1. Strengthening labor markets explain 60% of the decline in U.S. community college enrollment from 2009–19 and nearly 50% of the decline through 2023, according to the authors.
  2. Over one-third of the apparent community college enrollment decline stems from administrative reclassification, while four-year institutions have maintained stable enrollments.
  3. Of the last six periods of rising national unemployment, all but the pandemic-related rise coincide with local maxima in community college first-time enrollment, with less clear relationships for public four-year, private four-year, and for-profit colleges.

Related Articles:

  • The Unexpected Compression: Competition at Work in the Low Wage Labor Market — Labor market tightness produced an unexpected compression in the US wage distribution, with disproportionate wage growth at the bottom reducing the college wage premium and reversing nearly 40% of the rise in 90-10 wage inequality since 1980. The authors attribute this in part to increased competition for low-wage workers.
  • Are Young College Graduates Losing Their Edge in the Job Market? — Among unemployed workers aged 22–27, the rate of exiting unemployment for college graduates trended upward from 1976 to 2000 and then declined sharply, while the rate for high school graduates was stable until 2008 and now sits near its long-run average. The gap between the two groups narrowed after 2000 and closed entirely around 2019.
  • Military Officer Quality in the All-Volunteer Force — The authors find a steady decline in U.S. Marine Corps officers' General Classification Test scores, which is statistically associated with the expansion of college attendance and explains 96% of the measured change. They also find a positive association between African American officers and mean test scores, arguing affirmative action has not lowered officer quality.

AI Summary. Conventional data show wages have outpaced inflation for most workers, contradicting the narrative that prices have outrun incomes; the Consumer Price Index used to calculate real wages excludes borrowing costs. Many Americans rely on credit for homes and cars, and the ability of young Americans to buy first homes has deteriorated substantially.

Paul Krugman Krugman Wonks Out
Date Posted:
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Real wages are up 4% relative to just before the pandemic, but Krugman flags three reasons why many Americans are worse off than it appears: high interest rates on consumer credit, lower job-finding rates, and the high prices of starter homes.

Do standard inflation measures understate rising costs by omitting borrowing costs?

Core argument: Conventional economic data, setting aside pandemic years distorted by composition effects, show that most workers were not impoverished by inflation, contradicting the narrative that an affordability crisis stems from prices outpacing incomes.

I’ve grayed out the pandemic years, during which wage data were distorted by composition effects. Looking through that confusing period, the conventional economic data show that most workers were not impoverished by inflation. So the common narrative that we have an affordability crisis because prices have outpaced incomes just isn’t right. There’s a case to be made that both economists and their conventional economic measures and the public are right because conventional statistics don’t convey the reality that the economy is worse than it looks for many workers. Let me emphasize two points in particular. First, the Consumer Price Index, which economists use to calculate the real wage, doesn’t include borrowing costs. This is despite the fact that many Americans must rely on credit to make important purchases — houses, of course, but also consumer durables, especially cars. And interest rates have risen sharply since 2022. Borrowing costs are up. Jobs are hard to find. And one crucial aspect of affordability, the ability of young Americans to buy their first houses, has deteriorated substantially.

Takeaways by Macro Roundup® AI

  1. Conventional economic data, setting aside pandemic years distorted by composition effects, show that most workers were not impoverished by inflation, contradicting the narrative that an affordability crisis stems from prices outpacing incomes.
  2. The Consumer Price Index used to calculate real wages excludes borrowing costs, even though many Americans rely on credit for houses and consumer durables such as cars, and interest rates have risen sharply since 2022.
  3. The ability of young Americans to buy their first houses has deteriorated substantially, alongside higher borrowing costs and jobs that are hard to find.

Related Articles:

  • The Middle Class Is Buckling Under Almost Five Years of Persistent Inflation — US prices for goods and services are 25% above 2020 levels, and 44% of middle-income respondents in the University of Michigan consumer sentiment survey said their finances were worse than a year earlier versus 23% who said better, with most citing higher prices. Retailers report middle-income customers pulling back on discretionary spending.
  • The Cost of Money is Part of the Cost of Living: New Evidence on the Consumer Sentiment Anomaly — Variation in the University of Michigan consumer sentiment index that inflation and unemployment cannot explain is strongly correlated with growth in consumer borrowing costs, such as mortgage and car loan rates. The authors estimate that including interest payments and homeownership costs in the consumer price index would raise measured inflation from 3% to 9%.
  • 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. Consumption-based poverty in the U.S. fell 10.6 percentage points (81%) since 1980 and income poverty measured by an anchored Supplemental Poverty Measure fell 6.9 points (53%), while the Official Poverty Measure fell less than 2 points, suggesting the official measure understates long-run progress. The authors attribute part of the divergence to worsening underreporting of income.

Melissa Kearney and James Sullivan Aspen Economic Strategy Group
Date Posted:

While the “income poverty” rate using the OPM is 11.1%, the rate of “consumption poverty” fell from 13% of Americans in 1980 to 2.4% in 2023. An improved measure of the income poverty rate fell by less (6.9pp), perhaps due to underreporting of income.

Does the official poverty measure understate long-run progress against poverty?

Core argument: Consumption poverty in the United States fell 10.6 percentage points (81%) since 1980, dropping from 13% in 1980 by construction to 9% in 2000 and 2.4% in 2010.

Consumption poverty fell substantially between 1980 and 2023, falling from 13% in 1980 (by construction) to 9% in 2000 and to 2.4% in 2010. In contrast, the official rate fell by less than 2 percentage points between 1980 and 2023, erroneously suggesting that long-run progress has been minimal. The narrative about poverty trends told by the anchored Supplemental Poverty Measure (SPM) and the consumption measure is very different than the misleading narrative suggested by the Official Poverty Measure (OPM). Since 1980, income poverty measured using the anchored SPM has fallen by 6.9 percentage points (53%) and consumption poverty has fallen by 10.6 percentage points (81%). A leading explanation for why consumption and income poverty diverged so noticeably after the early years of the first decade of the 2000s is that the underreporting of income seems to have gotten appreciably worse. If one were to account for this underreporting, the decline in income poverty would likely be even greater.

Takeaways by Macro Roundup® AI

  1. Consumption poverty in the United States fell 10.6 percentage points (81%) since 1980, dropping from 13% in 1980 by construction to 9% in 2000 and 2.4% in 2010.
  2. The Official Poverty Measure fell by less than 2 percentage points between 1980 and 2023, erroneously suggesting minimal long-run progress, while the anchored Supplemental Poverty Measure shows income poverty down 6.9 percentage points (53%).
  3. A leading explanation for the divergence between consumption and income poverty after the early 2000s is that underreporting of income appears to have worsened appreciably; accounting for it would likely show an even greater decline in income poverty.

Related Articles:

AI Summary. Nearly 22mm Americans with Affordable Care Act health insurance face sharply higher premiums if the enhanced tax credits expire. Subsidies were originally limited to households earning up to 400% of the federal poverty level — $128,600 for a family of four — before that cap was lifted, extending aid to more middle-class enrollees.

Guy Chazan Financial Times
Date Posted:

According to a KFF analysis, the average ACA marketplace enrollee will see their annual out-of-pocket premium rise to $1,904 in 2026 from $888 in 2025. ~22mm Americans are enrolled in healthcare coverage via the ACA.

Will premiums rise sharply if enhanced health insurance subsidies expire?

Core argument: Nearly 22 million Americans enrolled in Affordable Care Act health insurance will see premiums soar next year if their tax credits expire as expected on December 31.

[Nearly] 22mm Americans enrolled in health insurance under the Affordable Care Act will see their premiums soar next year if their tax credits expire as expected on December 31. Initially, only those earning up to 400% of the federal poverty level (FPL) — currently $128,600 a year for a family of four — qualified for the ACA tax credits. Joe Biden’s administration lifted that cap in 2021, and since then, the subsidies have been available to millions more middle-class Americans. In West Virginia, a historic number of people enrolled in health insurance as a result of the change. “Our ACA marketplace this year had about 67,000 enrollees, up from 23,000 in 2022,” said Rhonda Rogombé of the West Virginia Centre on Budget and Policy.

Takeaways by Macro Roundup® AI

  1. Nearly 22 million Americans enrolled in Affordable Care Act health insurance will see premiums soar next year if their tax credits expire as expected on December 31.
  2. ACA tax credits were initially limited to those earning up to 400% of the federal poverty level, currently $128,600 for a family of four, until the Biden administration lifted that cap in 2021, extending subsidies to millions more middle-class Americans.
  3. West Virginia's ACA marketplace had about 67,000 enrollees, up from 23,000 in 2022, according to Rhonda Rogombé of the West Virginia Centre on Budget and Policy.

Related Articles:

  • The Great “Transfer”-mation — Government transfers rose from 8.2% of Americans' total personal income in 1970 to 17.6% in 2022, making them the third largest income source after work and investments. The share of U.S. counties drawing a quarter or more of personal income from transfers rose from under 1% in 1970 to 53% in 2022.
  • Saved by Medicaid: New Evidence on Health Insurance and Mortality from the Universe of Low-Income Adults — Using linked Census and tax records for 37m low-income adults, the authors estimate that state Medicaid expansions raised enrollment by 12 percentage points and cut mortality among low-income adults by 2.5%, implying a 21% reduction in the mortality hazard of new enrollees. They estimate direct budgetary costs of $5.4m per life saved and $179,000 per life-year saved.
  • The Problematic Politics of Trump’s Bill: More Lower-Income Americans Are Voting GOP — The number of Republican-held seats among the one-third of U.S. House districts most reliant on Medicaid has more than doubled since 2009. Five of the 18 Republican-held districts rated competitive and 13 of the 22 competitive Democratic-held districts fall within that most Medicaid-dependent third.

AI Summary. Swiss voters rejected a proposed federal inheritance and gift tax of 50% on estates and transfers above SFr50mn, with revenue earmarked for climate-related spending, a break from Switzerland's tradition of decentralised, low-burden taxation. The French parliament separately rejected proposed wealth taxes of 2% on wealth above €100mn and 3% above €10mn.

Mercedes Ruehl and Josh Spero Financial Times
Date Posted:

Swiss voters overwhelmingly rejected a proposed 50% inheritance levy on estates above ~$62mm. 43% of voters turned out, with ~79% voting against the proposed tax.

Are European voters and legislators rejecting new taxes on large fortunes?

Core argument: Swiss voters rejected a Young Socialists proposal for a federal inheritance and gift tax of 50% on estates and transfers above SFr50mn (£47mn), with revenue earmarked for climate-related spending.

The proposal from the far-left Young Socialists party would have introduced a federal inheritance and gift tax of 50% on estates and transfers above SFr50mn (£47mn), marking a dramatic break from Switzerland’s tradition of decentralised, low-burden taxation. Revenue would have been earmarked for climate-related spending. In late October the French parliament voted to reject a Socialist proposal for a tax of 2% on wealth of more than €100mn. Another proposal for a 3% tax on wealth over €10mn was also rejected.

Takeaways by Macro Roundup® AI

  1. Swiss voters rejected a Young Socialists proposal for a federal inheritance and gift tax of 50% on estates and transfers above SFr50mn (£47mn), with revenue earmarked for climate-related spending.
  2. The rejected Swiss measure would have marked a break from Switzerland's tradition of decentralised, low-burden taxation.
  3. France's parliament rejected a Socialist proposal for a 2% tax on wealth above €100mn, as well as a separate proposal for a 3% tax on wealth above €10mn.

Related Articles:

Tuesday, December 2, 2025

AI Summary. In venture capital, only consistently investing with top-quartile managers outperformed the S&P 500, while the median manager at best matched public equity markets and fourth-quartile managers destroyed value relative to equities. Fees are part of the issue: an 11.7% annualized NASDAQ 100 return falls to 7.4% under a 2%/20% fee structure.

Michael Cembalest J.P. Morgan
Date Posted:

For venture funds vintage 2018 and later both the mean and median investor have underperformed the S&P 500 as of 2025. While the top quartile has outperformed the S&P, returns are highly skewed and concentrated in the top 5% of managers.

Does venture capital beat public equities for most investors?

Core argument: Applying a 2%/20% fee structure to the NASDAQ 100's 11.7% annualized return since 1997 cuts it to 7.4%, which appears to be part of why venture returns trail public equity benchmarks.

Limited partners needed to consistently invest with top quartile [venture] managers to outperform the S&P 500 [btw 1999 and 2025]; unlike the buyout space, the median manager has at best matched the public equity markets. The large gap between the average and median manager is a clue that a select group of venture funds did very well with the rest trailing. Fourth-quartile venture managers have been a money pit, destroying substantial value relative to the equity market every year since the late 1990’s. These findings are similar to an analysis showing venture returns from self-reported databases trailing different public equity market benchmarks through 2023. Part of the issue appears to be fees; the annualized NASDAQ 100 return since 1997 of 11.7% becomes 7.4% if a 2%/20% fee structure is applied to it. Top quartile venture performance is extremely skewed to the top 5% of managers.

Takeaways by Macro Roundup® AI

  1. Applying a 2%/20% fee structure to the NASDAQ 100's 11.7% annualized return since 1997 cuts it to 7.4%, which appears to be part of why venture returns trail public equity benchmarks.
  2. Limited partners needed to consistently invest with top-quartile venture managers to outperform the S&P 500 between 1999 and 2025, while the median venture manager at best matched public equity markets, unlike in buyouts.
  3. Fourth-quartile venture managers have destroyed substantial value relative to the equity market every year since the late 1990s, and top-quartile venture performance is heavily skewed to the top 5% of managers.

Related Articles:

  • It’s Mostly a Paper Moon: Alternative Investments Review — Venture capital financing has tightened: the median time between funding rounds has lengthened, more startups have shut down through bankruptcy, and the share of "down rounds" — new financing at a lower valuation — rose from 8% to nearly 20%, with those rounds cutting post-money valuations by more than 50%.
  • 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.

AI Summary. Larger information-technology quality adjustments and hours-worked measurement distortions explain about 30% of the average annual US-Euro area total factor productivity growth gap since 1995, leaving an adjusted gap near 0.25pp. The authors estimate greater US intangible investment spillovers contribute about 0.1pp, more efficient resource allocation about 0.1pp, and better management and larger firms about 0.05pp.

Pierfrancesco Mei Goldman Sachs
Date Posted:

Since 1995, US labor productivity has grown at a 2.1% mean annual rate, 2x that of the Euro area. Growth in capital input accounts for .55pp of the gap; spillovers from intangibles, greater allocative efficiency, and measurement error each explain ~.1pp.

Why does US productivity growth outpace the Euro area's?

Core argument: Larger IT quality adjustments and hours-worked measurement distortions explain roughly 30% of the average annual US–Euro area TFP growth gap since 1995, leaving an adjusted gap of about 0.25pp.

Labor productivity can be decomposed into three parts: the contribution of capital inputs to output per hour (“capital deepening”), the contribution of changes in characteristics of the labor force such as workers’ education to output per hour (“labor quality”), and [growth in] total factor productivity (TFP) - the portion of output growth not explained by the growth in labor and capital. Taken together, larger IT quality adjustments and hours worked measurement distortions explain approximately 30% of the average annual US-Euro area TFP growth gap since 1995, leaving an adjusted gap of around 0.25pp. Four main factors help to explain the adjusted gap in annual TFP growth [see figure]. First, US firms invested significantly more in intangibles such as software and R&D. These investments have boosted productivity growth [not only] through capital deepening [but also] via spillovers to TFP, [which] we estimate account for around 0.1pp of the annual TFP gap. Second, labor and capital are allocated more efficiently to productive firms in the US. If the Euro area had achieved US-level allocative efficiency, the US-Euro area TFP [growth] gap would be ~0.1pp lower each year. Better [US] management practices and the fact that US firms are larger than European firms throughout the firm lifecycle explain ~0.05 ppt.

Takeaways by Macro Roundup® AI

  1. Larger IT quality adjustments and hours-worked measurement distortions explain roughly 30% of the average annual US–Euro area TFP growth gap since 1995, leaving an adjusted gap of about 0.25pp.
  2. Spillovers to TFP from greater US investment in intangibles such as software and R&D are estimated to account for around 0.1pp of the annual US–Euro area TFP growth gap.
  3. Had the Euro area matched US allocative efficiency in assigning labor and capital to productive firms, the annual TFP growth gap would be about 0.1pp lower, with better US management practices and larger US firms across the firm lifecycle explaining ~0.05pp.

Related Articles:

  • Why the U.S. Economy Is Trouncing Europe’s — Only about 12% of Americans score at the highest levels on international academic tests versus 34% at the lowest, yet the U.S. has created nearly 250 companies worth over $10bn ($30tn in value) against Europe's 14, and median U.S. disposable household income is 25% above Germany's. The author argues expanding high-skilled immigration is the fastest way to accelerate growth.
  • SF FedViews: Solid Growth, but Small Cracks Have Emerged — Since the second half of 2023, four-quarter US productivity growth has averaged nearly 2.5%, well above the pre-pandemic trend of about 1% to 1.25%, supporting real GDP growth. It remains unclear whether this reflects a higher productivity regime fostered by rising AI use or a temporary post-pandemic reorganization surge.
  • Concentrated Growth: The Role Of The IT Sector — Since 1988, total factor productivity in the information technology sector has risen about 178%, versus about 12% across all non-IT sectors combined, while aggregate productivity rose about 40%. The IT sector accounts for roughly 45% of cumulative aggregate productivity growth, once sectoral linkages to downstream industries are weighted in.

AI Summary. Europe has cut carbon emissions 30% from 2005 levels versus 17% in the US, while the shift to renewables has helped push electricity prices higher across much of the continent. Average electricity prices for heavy industry in the European Union are roughly 2x those in the US and 50% above China.

Tom Fairless and Max Colchester Wall Street Journal
Date Posted:

High energy costs due to carbon reduction goals are driving deindustrialization in Europe. The mean electrical price for heavy industries in the EU is ~2x that of the U.S. and ~1.5x that of China.

Has Europe's shift to renewables raised electricity prices for industry?

Core argument: Europe has cut carbon emissions by 30% from 2005 levels, more than any other region and above the U.S. decline of 17%, while the rush to renewables has helped drive up electricity prices across much of the continent.

Europe has succeeded in slashing carbon emissions more than any other region—by 30% from 2005 levels, compared with a 17% drop for the U.S. But along the way, the rush to renewables has helped drive up electricity prices in much of the continent. Germany now has the highest domestic electricity prices in the developed world, while the U.K. has the highest industrial electricity rates, according to a basket of 28 major economies analyzed by the International Energy Agency. Italy isn’t far behind. Average electricity prices for heavy industries in the European Union remain roughly twice those in the U.S. and 50% above China. Energy prices have also grown more volatile as the share of renewables increased.

Takeaways by Macro Roundup® AI

  1. Europe has cut carbon emissions by 30% from 2005 levels, more than any other region and above the U.S. decline of 17%, while the rush to renewables has helped drive up electricity prices across much of the continent.
  2. Average electricity prices for heavy industry in the European Union remain roughly twice those in the U.S. and 50% above China's.
  3. Germany has the highest domestic electricity prices and the U.K. the highest industrial electricity rates among a basket of 28 major economies analyzed by the International Energy Agency, with Italy close behind.

Related Articles:

  • Europe Is Losing — Europe's share of global stock market valuations has fallen from 18% to 10% for the EU and from 8.3% to 2.6% for the UK, while America's has held at 48%. Tax revenue equals 38–44% of output in Germany, Italy and France versus 25% in the US, and industrial electricity costs 3–4x US levels.
  • Europe is Pricing Itself Out of Existence — Europe paid 166.3% more for its primary energy mix than it would have using conventional sources, equal to 5.6% of GDP rather than 3.37%, which the author argues largely explains minimal European growth. European Union primary energy consumption has fallen 17.47% from its peak, with renewables at 16.6% of the mix and renewable electricity priced at 5x conventional.
  • The Future of European Competitiveness – A Competitiveness Strategy for Europe — A European Union competitiveness report attributes the EU's labour productivity growth gap with the US largely to weaker activity in information and communications technology and large-scale digital services; excluding main ICT sectors, EU productivity was broadly at par with the US from 2000-2019. It estimates Europe's investment share must rise about 5 percentage points of GDP.

AI Summary. TSMC's Arizona chip plant cannot compete on cost with its Taiwan operations because U.S. construction and operating costs are far higher, even though equipment costs — usually the largest share of cost per wafer — are similar across locations. The author argues the Arizona plant does little to reduce concentration of advanced logic production in Taiwan.

Dylan Patel, Steven Lee and Jeff Koch Semianalysis
Date Posted:

The Semianalysis team argues, “The Arizona fab cannot compete globally in a world where TSMC Taiwan also exists.” In 2025 TSMC’s Arizona facility has an 8% gross margin per Wafer relative to TSMC Taiwanese fab’s 62% margin.

Can U S chip fabs compete on cost with Taiwan?

Core argument: TSMC's Arizona fab cannot compete globally in a world where TSMC Taiwan also exists, as U.S. fab construction and operational costs are so high that they make the product extremely expensive.

The Arizona fab cannot compete globally in a world where TSMC Taiwan also exists. The equipment costs, normally the majority contributor to overall cost per wafer, are basically the same between geographies. Still, the fab construction and operational costs in the U.S. are so high that they make the product extremely expensive. The Arizona fab, while certainly better than nothing, does not significantly de-risk the concentration in TSMC Taiwan. Despite accelerating the follow-on phases in Arizona, the current trajectory will not be anywhere close to 40% of advanced logic production in 2028.

Takeaways by Macro Roundup® AI

  1. TSMC's Arizona fab cannot compete globally in a world where TSMC Taiwan also exists, as U.S. fab construction and operational costs are so high that they make the product extremely expensive.
  2. Equipment costs, normally the majority contributor to overall cost per wafer, are basically the same between geographies, leaving fab construction and operational costs as the source of the U.S. disadvantage.
  3. Even with accelerated follow-on phases in Arizona, the current trajectory will not come anywhere close to 40% of advanced logic production in 2028, and the fab does not significantly de-risk concentration in TSMC Taiwan.

Related Articles:

  • The Chips Act Has Been Surprisingly Successful So Far — The US government has spent over half of its $39bn in Chips Act semiconductor incentives, and chip companies and supply chain partners have announced $327bn of investments over the next 10 years, according to Semiconductor Industry Association calculations. US data show a 15-fold increase in construction of computing and electronics manufacturing facilities.
  • TSMC’s Arizona Chip Production Yields Surpass Taiwan’s in Win for US Push — Taiwan Semiconductor Manufacturing Co. reports that the share of usable chips produced at its Phoenix, Arizona plant is about 4 percentage points higher than at comparable factories in Taiwan. Yield is a critical industry measure because it determines whether companies can cover the enormous costs of a chip plant.
  • TSMC To Speed Up Construction Of US Chip Plants By ‘Several Quarters’ — TSMC says it is accelerating construction of its second and third Arizona plants by several quarters to meet strong U.S. customer demand for smartphone and AI computing chips. The company has committed an additional $100bn to build five more facilities in the state and expects around 30% of its 2-nanometer and more advanced capacity to be located in Arizona.

AI Summary. The National Association of Realtors' mail survey, with a 3.5% response rate, puts the typical first-time homebuyer at age 40, while New York Federal Reserve credit-report data for the same period show an average of 36.2 years and a median of 33. The survey underrepresents buyers under 35 by 17 percentage points.

Edward Pinto and Joseph Tracy American Enterprise Institute
Date Posted:

FRBNY data indicate that the age of the median American first-time home buyer is 33 years old, ~ the same as in 2021, not 40 and not up 7 years since 2021, as the National Association of Realtors’ mail survey suggests.

Does survey data overstate the typical first-time homebuyer's age?

Core argument: NAR's 2025 Profile of Home Buyers and Sellers puts the typical first-time buyer at age 40, 9 years older than in 2001 and 7 years older than in 2021.

The National Association of Realtors’ (NAR) 2025 report Profile of Home Buyers and Sellers, finds that the typical FTB was 40 years old—9 and 7 years older than typical in 2001 and 2021 respectively. However, the New York Federal Reserve Bank Consumer Credit Panel (CCP) shows markedly different results—a 1.7 and 0.2 year reduction in average age for 2001 and 2021 respectively. For the NAR report, covering from July 2024 to June 2025, 189,750 surveys were mailed to a “representative sample” of buyers and sellers. However, only 6,103 completed surveys were received, a response rate of just 3.5%, 21 percent, or 1,281, being FTBs. The CCP is based on a 5% random sample of all credit reports, which reports provide both borrower age and home buying history. The CCP data, for the same period as the NAR, found the average and median FTB was 36.2 and 33 years old, both well under the NAR’s age of 40. While both have nearly identical shares for age 35-44, the NAR’s under age 35 groups are underrepresented by 17 percentage points and the aged 45 to 74 buyers are overrepresented by 18 percentage points respectively, compared to the CCP. The NAR bias to a higher age is perhaps not surprising given that it is a mail survey with 120 questions, which does [not] lend itself to a high response rate by Millennials and GenZ-ers.

Takeaways by Macro Roundup® AI

  1. NAR's 2025 Profile of Home Buyers and Sellers puts the typical first-time buyer at age 40, 9 years older than in 2001 and 7 years older than in 2021.
  2. The New York Fed's Consumer Credit Panel, drawn from a 5% random sample of credit reports, finds average and median first-time buyer ages of 36.2 and 33 for the same July 2024–June 2025 period.
  3. NAR mailed 189,750 surveys and received 6,103 completed responses, a 3.5% response rate, with 1,281 (21%) from first-time buyers, and its under-35 group is underrepresented by 17 percentage points versus the Consumer Credit Panel.

Related Articles:

  • US Median First-Time Homebuyer Age Now At Record-High of 40 — The median age of first-time homebuyers in the US has reached a record 40, up from 33 in 2021 and 29 when the National Association of Realtors survey began in 1981. High home prices and mortgage rates are delaying homeownership for millions of Americans.
  • The State of Housing (Un)Affordability in the US — 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.
  • “Giving Up”: The Impact of Decreasing Housing Affordability on Consumption, Work Effort, and Investment — Survey data show that among renters with net worth below $300,000, 4–6% say always giving their best effort at work is "not important," roughly twice the 2–3% rate among homeowners at all net worth levels; renters with net worth above $300,000 resemble homeowners. The authors argue that abandoning the aspiration of homeownership may reduce the value of additional work effort.

AI Summary. Rising Japanese government bond yields threaten a carry trade in which investors borrow in yen and hold dollar assets, which has grown at 12.6% a year since the Federal Reserve began tightening. The increase in the US 10-year Treasury yield appears to reflect money being pulled from Treasuries and reallocated to Japan.

John Authers Bloomberg
Date Posted:

10-year Treasury yields rose 7.3bps Monday to 4.1%, likely due to the 10-year JGB yield hitting 1.868%, which likely catalyzed something of an unwinding of the yen carry trade.

Are rising Japanese bond yields pulling money out of Treasuries?

Core argument: The carry trade of borrowing in yen and parking the proceeds in dollars has grown at 12.6% per annum in the four years since the Federal Reserve began tightening in 2022.

The spike in the US 10-year yield gets hard to explain without invoking Japan. And here, the key point is that Tokyo has provided reliable, cheap funds. Higher JGB bond yields would endanger a lucrative trade. In the four years since the Fed began tightening in 2022, a carry trade of borrowing in yen and parking in the dollar has grown at 12.6% per annum. If JGBs are going to start offering a competitive yield, then that easy money is no more, and it makes sense to pull money from Treasuries to reallocate to Japan. That seems to be what’s happening.

Takeaways by Macro Roundup® AI

  1. The carry trade of borrowing in yen and parking the proceeds in dollars has grown at 12.6% per annum in the four years since the Federal Reserve began tightening in 2022.
  2. The spike in the US 10-year Treasury yield is hard to explain without invoking Japan, where Tokyo has supplied reliable, cheap funds that higher Japanese government bond yields would put at risk.
  3. If Japanese government bonds begin offering a competitive yield, investors have reason to pull money from Treasuries and reallocate to Japan, which appears to be happening.

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