Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…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
  • “…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 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
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Tuesday, December 23, 2025

AI Summary. The authors estimate that tariff pass-through into US import prices was 80% in 2018–2019 and 94% more recently, while exchange-rate pass-through was low in both periods. Because imported inputs matter for US manufacturing, they argue much of the tariff burden falls on US producers, roughly a 1–2 percentage-point tax on manufacturing.

Gita Gopinath and Brent Neiman Harvard University
Date Posted:
Is Database:
Database

Actual 2025 tariff rates are, to date, far less than statutory rates, but the costs of the tariffs are mostly borne by the US – estimated tariff pass-through to US prices in 2025 is 94%. Tariffs on imports act like a 1 to 2pp tax on US manufacturing.

Who bears the burden of tariffs on US imports?

Core argument: The authors estimate tariff pass-through into U.S. import prices at 94% in 2025, up from 80% in 2018–2019, with few imports showing low pass-through, while exchange rate pass-through is low in both periods.

After peaking at 32.8% in April, the statutory rate in September was 27.4%. To calculate the “actual” rate, we divide the tariff revenues that the U.S. government collects each month on imports from each exporter-HTS pair by the value of those imports. [HTS stands for Harmonized Tariff Schedule, a standardized system of codes used to classify products for customs purposes]. The ex-tariff price of U.S. imports from China declined by 2.5% and the price of imports from the others were essentially unchanged or rose by two percent or less. Our preferred methodology results in an estimated tariff pass-through rate of 80% during 2018-2019 and 94% during 2025. There are few indications of any meaningful set of imports exhibiting low pass-through. By contrast, exchange rate pass-through into U.S. import prices is low across both periods. The tariffs have led to striking changes in sourcing patterns. The share of Chinese exports in U.S. goods imports collapsed from 22% at the end of 2017 to about 12% at the end of 2024. By September 2025, China’s share was only 8%. Given the high pass-through to import prices and the importance of imported inputs in U.S. manufacturing, much of the incidence of the tariffs falls on U.S. producers [roughly equivalent to a tax on manufacturing of 1 to 2 ppt].    

Takeaways by Macro Roundup® AI

  1. The authors estimate tariff pass-through into U.S. import prices at 94% in 2025, up from 80% in 2018–2019, with few imports showing low pass-through, while exchange rate pass-through is low in both periods.
  2. China's share of U.S. goods imports fell from 22% at the end of 2017 to about 12% at the end of 2024 and 8% by September 2025, while ex-tariff prices of U.S. imports from China declined 2.5%.
  3. Given high pass-through and the importance of imported inputs, the authors argue much of the tariffs' incidence falls on U.S. producers, roughly equivalent to a 1 to 2 percentage point tax on manufacturing; the statutory rate was 27.4% in September after peaking at 32.8% in April.

Related Articles:

  • Who Pays Trump’s Tariffs? — Amalgamated estimates from Goldman Sachs, the Yale Budget Lab and Allianz Trade indicate U.S. importers initially absorbed 64% of U.S. tariff costs, with 14% borne by foreign exporters and 22% passed to consumers. The estimates project the consumer share rising to about 67%, leaving the price level 1–1.5 percentage points higher than without the tariffs.
  • Are Businesses Absorbing the Tariffs or Passing Them on to Their Customers? — About three-quarters of manufacturing and service firms facing tariff-driven cost increases reported passing at least some of those costs to customers through higher prices, while roughly a quarter of each said they absorbed the full increase without raising prices. Nearly a third of manufacturers and about 45% of service firms reported full pass-through.
  • CBO’s New Projections Show $1 Trillion Less in Tariff Savings — The Congressional Budget Office now projects tariffs enacted this year will reduce debt including interest by $3.0tn through 2035, down from $4.0tn, reflecting policy changes and revised assumptions about duty-free imports and costs absorbed by foreign exporters. If courts strike down the emergency-powers tariffs, the debt reduction would fall to roughly $0.9tn.

AI Summary. Slowing US growth — attributed to trade frictions, immigration restrictions and risks from a K-shaped economy — combined with inflation stuck near 3% amounts to a stagflation environment, even as the medium-term outlook looks strong. Real business investment growth is concentrated in information processing equipment such as computers, data centers and software, while non-AI capital spending growth is roughly zero.

Torsten Sløk Apollo
Date Posted:

Sløk sees the US entering 2026 “squarely in a stagflation environment,” noting that real private fixed investment net of AI spending saw no growth y/y, residential investment declined y/y, and inflation is “stuck near 3%.”

Is the US economy in stagflation with business investment concentrated in AI?

Core argument: The authors place the US in a stagflation environment in the short term, with inflation stuck near 3% and growth slowing on trade frictions, immigration restrictions, and risks from a deepening K-shaped economy.

We are bullish on the medium-term outlook for the US economy. However, in the short term, slowing growth — driven by trade frictions, immigration restrictions and risks from a deepening K-shaped economy— combined with inflation stuck near 3% puts the US squarely in a stagflation environment. AI’s dominance points to potential weakness in the broader macroeconomic picture. Take, for example, capex and business investment levels. This chart shows real private fixed investment, which is a different way of saying business investment. The dark blue line represents investment in information processing equipment including computers, data centers and software. Essentially, everything that has to do with AI. And not surprisingly, there’s been strong growth there. Compare that with a light blue line, which is growth in non-AI business spending. That line is basically at zero, meaning there has been no growth in corporate capex outside of AI.

Takeaways by Macro Roundup® AI

  1. The authors place the US in a stagflation environment in the short term, with inflation stuck near 3% and growth slowing on trade frictions, immigration restrictions, and risks from a deepening K-shaped economy.
  2. Real private fixed investment in information processing equipment — computers, data centers and software tied to AI — has grown strongly, while growth in non-AI business spending is basically at zero.
  3. The authors remain bullish on the medium-term US economic outlook while arguing that AI's dominance points to potential weakness in the broader macroeconomic picture.

Related Articles:

  • Let Them Eat Compute: Data Centers’ Implications for Mortgage Finance — The author argues the housing affordability crisis stems from the sharp decline in 30-year fixed mortgage rates rather than their subsequent rise, since fixed rates let rate dips boost purchasing power, lifting existing-home sales 25% and prices 32% relative to rents. A costly data center buildout is crowding out for-sale housing.
  • 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.
  • Does Gemini Show That Scaling Still Works? No. — The author argues that frontier model pre-training is becoming uneconomic, delivering only marginal capability gains for enormous spending on chips, power, and compute. Meaningful advances have shifted to post-training, inference-time compute, and tool-augmented reasoning rather than raw model size.

AI Summary. China's annual goods trade surplus surpassed $1tn for the first time, and analysts project its current account surplus as a share of global GDP will exceed levels last seen during the mid-2000s "China shock." The Chinese currency is estimated to be undervalued to a comparable degree, and the analysts expect gradual appreciation to continue.

Kamakshya Trivedi, Dominic Wilson, Vickie Chang and Victor Engel Goldman Sachs
Date Posted:

The first “China Shock” in the mid-2000s was followed by significant yuan appreciation. GS expects “gradual appreciation pressure on the undervalued CNY” in 2026, and forecasts that the Chinese surplus will flow into global assets beyond US fixed income.

Is China's trade surplus set to exceed the first China shock?

Core argument: China's annual goods trade surplus exceeded $1 trillion for the first time in November, and the authors' China team forecasts the current account surplus, as a share of global GDP, to exceed levels last seen during the mid-2000s "China Shock.".

China's annual goods trade surplus exceeded $1 trillion for the first time in November and, as a percent of global GDP, our China team forecasts the current account surplus to exceed the levels last seen at the time of the first China shock in the mid-2000s.The sustained export growth is a testament to the competitiveness of China's currency. The degree of CNY undervaluation is also comparable to the period of the "China Shock" in the mid-2000s, and that was followed by large currency appreciation. We have already seen a shift towards CNY appreciation this year, with the USD/CNY fix gradually but steadily moving stronger since 'Liberation Day'. We expect that move to extend in the year ahead. Although the currency is tightly managed, policymakers should be comfortable with a gradual appreciation pace that helps advance RMB internationalisation while still leaving the currency cheap. Indeed, given the negative competitive impact [of the Chinese trade surplus] on other countries, allowing modest but sustained appreciation is part of the equilibrating mechanism and can serve to ensure that the protectionist pushback is not too severe. A recycling of the current account surplus into global assets is another outcome but, given geopolitical and portfolio considerations, these investments may support a more diversified pool of global assets beyond US fixed income.

Takeaways by Macro Roundup® AI

  1. China's annual goods trade surplus exceeded $1 trillion for the first time in November, and the authors' China team forecasts the current account surplus, as a share of global GDP, to exceed levels last seen during the mid-2000s "China Shock.".
  2. The authors judge CNY undervaluation comparable to the mid-2000s China Shock period, which was followed by large appreciation, and expect the gradual strengthening of the USD/CNY fix seen since "Liberation Day" to extend in the year ahead.
  3. The authors argue that modest but sustained CNY appreciation forms part of the equilibrating mechanism limiting protectionist pushback while advancing RMB internationalisation, and that recycling the current account surplus may support a more diversified pool of global assets beyond US fixed income.

Related Articles:

  • China’s Yuan Is 25% Undervalued on Trade Basis, Goldman Says — Goldman Sachs estimates the Chinese yuan is about 25% undervalued on a weighted average of two of its models: one based on productivity and terms of trade puts fair value at 5 per US dollar versus roughly 7.06 in the market, while a current-account-based model finds it 12% undervalued.
  • Sticking with What Works: Raising GDP Forecast on China’s Manufacturing Push — Stronger Chinese growth driven by export-oriented manufacturing may not produce net positive spillovers: for every 1pp export-driven boost to China's GDP, other economies may see a 0.1–0.3pp drag, with high-tech producers such as Europe and Japan facing greater pressure. Cheaper Chinese goods continue to exert a disinflationary impulse.
  • US Exceptionalism Versus Chinese Uninvestibility (Part I) — China redirected domestic savings toward de-Westernizing its industrial supply chains through tighter capital controls, suspended stock listings, and concentrated bank lending, which the author argues was deflationary and produced poor investor returns. The author argues that if the US pursues comparable supply-chain separation from China, capital would shift into lower-return activities.

AI Summary. Gold reached a record high amid escalating geopolitical tensions and expectations of further US interest-rate cuts, rising as much as 1.2% to just below $4,500 an ounce. Silver also set an all-time peak near $70 an ounce, with its roughly 140% rally supported by speculative inflows and lingering supply dislocations across major trading hubs.

Mark Burton, Robin Paxton and Yvonne Yue Li Bloomberg
Date Posted:

Gold’s spot price has risen 70% this year, hitting an all-time high of just under $4,500 an ounce – its best performance since 1979. When gold hit $850 nominal in January 1980 (~ $3,590 in 2025 dollars), the US dollar was collapsing amid stagflation.

Are rate-cut expectations and geopolitical tensions driving gold and silver to records?

Core argument: Spot gold rose as much as 1.2% to just below $4,500 an ounce, its 50th record high this year, on escalating geopolitical tensions and prospects for further US rate cuts.

Gold rose to a record high — the 50th day it’s done so this year — on escalating geopolitical tensions and prospects for more US rate cuts. Silver also set an all-time peak. Spot gold climbed as much as 1.2% to just below $4,500 an ounce, extending gains after its biggest one-day jump in more than a month. Silver rose as much as 1.4% to within a cent of $70 an ounce. The white metal’s rally of around 140% this year has been even more spectacular than gold’s, with its most recent advance buoyed by speculative inflows and lingering supply dislocations across major trading hubs following a historic short squeeze in October.

Takeaways by Macro Roundup® AI

  1. Spot gold rose as much as 1.2% to just below $4,500 an ounce, its 50th record high this year, on escalating geopolitical tensions and prospects for further US rate cuts.
  2. Silver rose as much as 1.4% to within a cent of $70 an ounce, an all-time peak, with a rally of around 140% this year outpacing gold's gains.
  3. Silver's most recent advance was buoyed by speculative inflows and lingering supply dislocations across major trading hubs following a historic short squeeze in October.

Related Articles:

  • The Crazy Precious Metals Rally Starts Again — Precious metals prices for gold, silver, platinum and palladium have rallied following Federal Reserve meetings, with silver's gains spilling over into platinum and palladium. The author argues the rally reflects retail investors chasing a price spike rather than emerging-market central bank gold buying, occurring while the dollar is stable against other major currencies.
  • China’s Secretive Gold Purchases Help Fuel Record Rally — China's central bank has officially reported buying just 25 tonnes of gold this year, but Société Générale estimates from UK export and trade data that actual purchases could reach 250 tonnes, more than a third of global central bank demand. Buying also occurs through China's sovereign wealth fund and military, which need not disclose holdings promptly.
  • 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. Currencies of low-public-debt countries such as Switzerland and Sweden are showing increasing correlation with daily moves in gold and silver prices. Sweden's krona has traditionally been highly volatile without safe-haven attributes, a pattern the article attributes to the "debasement trade.

Robin Brooks Robin Brooks Substack
Date Posted:

Currencies of advanced economies with low public debt, such as Switzerland and Sweden, are becoming increasingly correlated with gold and silver prices, as investors seek safe havens from fiat “debasement.”

Are low-debt currencies now trading like gold and silver?

Core argument: Currencies of low-public-debt countries such as Switzerland and Sweden are showing increasing correlation with daily moves in gold and silver prices against the Dollar across G10 currencies.

Countries with low public debt levels like Switzerland or Sweden are seeing their currencies become increasingly correlated with moves in gold and silver prices. The chart shows the correlation of daily changes across G10 currencies against the Dollar with gold (blue) and silver (red) prices. It’s noteworthy that Sweden is so much in focus. The Krona has traditionally been a highly volatile currency that didn’t have safe haven attributes. The debasement trade is changing that.

Takeaways by Macro Roundup® AI

  1. Currencies of low-public-debt countries such as Switzerland and Sweden are showing increasing correlation with daily moves in gold and silver prices against the Dollar across G10 currencies.
  2. The Swedish Krona, traditionally a highly volatile currency without safe haven attributes, is now in focus, a shift attributed to the debasement trade.

Related Articles:

  • Across The Rich World, Fiscal Crises Loom — An analysis estimates most rich countries could keep debt stable as a share of their economies with only small primary surpluses—Britain's required surplus is 0.3% of GDP—even if all debt were refinanced immediately at current rates, but the tightening needed to stabilize debt ratios exceeds 2% of GDP in Britain and America and 3% in France.
  • Global Debt Report 2025 — About 60% of fixed-rate government debt in advanced economies maturing by 2027 — roughly $9tn — was issued before the recent interest-rate tightening, with weighted average yields below 2% versus projected 10-year rates near 3.6%, implying refinancing at nearly double the original cost. France, Spain, the UK, and the US face heightened vulnerability, with maturing debt exceeding 15% of GDP.
  • The Dollar Is Weaker Than You Think — Weakness in the Japanese Yen is masking dollar declines against other major currencies such as the Swedish Krona and Swiss Franc, so a trade-weighted dollar index excluding the Yen sits below the standard measure. The author argues this reflects a broader "debasement trade," with investors seeking safe havens including precious metals and other currencies.

AI Summary. A decades-old stockpile of samarium nitrate held at a chemical plant in France was refined into usable metal, allowing a U.S. maker of samarium-cobalt magnets to source the rare-earth material outside China. Samarium processed outside China costs 5–8x as much, and the French plant had stopped separating rare-earth elements as uneconomical.

Farah Stockman New York Times
Date Posted:

A stash of samarium nitrate in France can provide a workaround of more than a year for the American defense industry in the face of Chinese export controls.

How did a U.S. magnet maker source rare earths outside China?

Core argument: Samarium processed outside China costs five to eight times as much, and Solvay stopped separating rare-earth elements at its French factory two decades ago because the work had become "uneconomical," according to a company spokeswoman.

Arnold Magnetic Technologies, a Rochester, N.Y.-based manufacturer of samarium-cobalt magnets turned to Grant Smith, the chairman of Less Common Metals near Liverpool, England, one of the last remaining manufacturers of rare-earth metals in the Western world. Mr. Smith had already spent years hunting for alternatives to Chinese samarium. He found one: a decades-old cache of samarium nitrate in a factory in France. The material was owned by Solvay, a Belgian chemical company with a factory in France that was once one of the world’s largest producers of rare-earth oxides. Turning rock into magnets requires separating the 17 rare-earth elements from one another using massive vats of solvents, a process Solvay helped pioneer. Solvay had stopped separating rare-earth elements in France two decades ago, according to a spokeswoman, who said it had become “uneconomical.” Samarium processed outside China is five to eight times as expensive. But Solvay kept its stock of semifinished materials and still had the know-how and equipment to refine it into a form that Mr. Smith could use. And Less Common Metals happened to have an old furnace that could handle the job.

Takeaways by Macro Roundup® AI

  1. Samarium processed outside China costs five to eight times as much, and Solvay stopped separating rare-earth elements at its French factory two decades ago because the work had become "uneconomical," according to a company spokeswoman.
  2. Arnold Magnetic Technologies, a Rochester, N.Y., maker of samarium-cobalt magnets, turned to Grant Smith, chairman of Less Common Metals near Liverpool, England, one of the last remaining manufacturers of rare-earth metals in the Western world.
  3. The alternative supply relied on a decades-old cache of samarium nitrate owned by Solvay in France, Solvay's retained know-how and equipment to refine it, and an old furnace at Less Common Metals able to handle the job.

Related Articles:

  • China Hatches Plan to Keep U.S. Military From Getting Its Rare-Earth Magnets — China is designing a "validated end-user" system that would fast-track rare-earth and other restricted material export approvals for U.S. firms while excluding companies tied to the U.S. military. The arrangement would let China ease export flows while keeping the materials away from U.S. military suppliers.
  • 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.
  • 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.

Wednesday, December 24, 2025

AI Summary. Most major equity markets have outperformed the US, with Europe, China and Asia generating almost double US total returns in dollar terms and gains of 54% in Italy, 73% in Spain and 71% in Korea. US returns have been driven by strong earnings, particularly in technology, while Europe's have come largely from rising valuations.

Peter Oppenheimer, Sharon Bell, Guillaume Jaisson and Giovanni Ferrannini Goldman Sachs
Date Posted:

In 2025 Europe and Asia ex-China generated almost double the total return generated by the US in dollar terms. For 2026, GS forecasts a total dollar return of 15% for the S&P 500 in 2026, just under Europe’s STOXX 600 index (16% in dollar terms).

Are global equity markets outperforming the US, and what is driving returns?

Core argument: Europe, China and Asia generated almost double the total dollar returns of the US in 2025, with Spain up 73%, Korea 71% and Italy 54%, as geographic diversification benefited investors for the first time in many years.

Our main theme for 2025 has been to diversify, given that we came into this year with record country, sector and stock concentration. Most major equity markets have outperformed the US in 2025 as geographic diversification has, for the first time in many years, benefited investors. Europe, China and Asia have generated almost double the total returns compared with the US in dollar terms. Specific markets within the broader regions, such as Italy (54%), Spain (73%) and Korea (71%), have been particularly strong. We have also seen many EM markets start to break out on the upside, supported by stronger earnings growth and a tailwind from lower US interest rates and the dollar. We expect this trend to continue. While most equity markets have made good progress in 2025, the drivers have varied. In the US, equity markets have been driven by strong earnings (particularly in the tech space), whereas in other markets there has been a more even balance between improving earnings and rising valuations, with Europe seeing the biggest contribution of returns coming from valuation re-rating..

Takeaways by Macro Roundup® AI

  1. Europe, China and Asia generated almost double the total dollar returns of the US in 2025, with Spain up 73%, Korea 71% and Italy 54%, as geographic diversification benefited investors for the first time in many years.
  2. US equity gains in 2025 were driven by strong earnings, particularly in technology, while other markets saw a more even balance of improving earnings and rising valuations, with Europe's returns coming largely from valuation re-rating.
  3. Many emerging markets have begun breaking out on the upside, supported by stronger earnings growth and a tailwind from lower US interest rates and the dollar, a trend expected to continue.

Related Articles:

  • Building Long-Term Returns: Our 10-Year Forecasts — Analysts forecast an average annual total return of 6.5% for the S&P 500 stock index over the next 10 years, within a range of 3% to 10%, which would rank in the 27th percentile of 10-year returns since 1900. The base case combines 6% annual earnings-per-share growth, a 1% annual decline in valuations, and a 1.4% average dividend yield.
  • American Unexceptionalism — The S&P 500 has outperformed other developed-market equities by a cumulative 150% over the past fifteen years, but the authors attribute about 80% of that gap to a strengthening dollar and expanding relative valuations rather than fundamentals such as dividends, buybacks, and organic growth. U.S. valuations sit around the 90th percentile on price-to-earnings measures.
  • 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. The US economy grew at an annualised rate of 4.3% in the third quarter, exceeding economists' expectations of 3.2%. Growth was boosted by consumer spending on healthcare and computing, higher government defense spending, and exports, while business investment slowed and imports fell.

Myles McCormick and Kate Duguid Financial Times
Date Posted:
Is Database:
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The first official release of the BEA data for Q3 shows US GDP growth of 4.3% at an annualized rate, well above Bloomberg’s read of economists’ consensus prediction of 3.2%.

Is US economic growth outpacing economists' expectations?

Core argument: The US economy grew at an annualised 4.3% rate in the third quarter, according to the Bureau of Economic Analysis, exceeding the 3.2% expected by economists polled by Bloomberg and marking the strongest reading since the third quarter of 2023.

The US economy grew at an annualised rate of 4.3% in the third quarter, according to official data released on Tuesday that far surpassed economists’ expectations and was well ahead of previous quarters. The rise in GDP, which was boosted by consumer spending on healthcare and computing, compared with estimates of 3.2% among economists polled by Bloomberg and was the strongest reading since the third quarter of 2023. The figure from the Bureau of Economic Analysis was also helped by increases in government defence spending and exports. Business investment slowed, while imports fell.

Takeaways by Macro Roundup® AI

  1. The US economy grew at an annualised 4.3% rate in the third quarter, according to the Bureau of Economic Analysis, exceeding the 3.2% expected by economists polled by Bloomberg and marking the strongest reading since the third quarter of 2023.
  2. Consumer spending on healthcare and computing boosted third-quarter US GDP, alongside increases in government defence spending and exports.
  3. Business investment slowed and imports fell in the third quarter, according to Bureau of Economic Analysis data.

Related Articles:

  • OECD Economic Outlook, Volume 2025 Issue 2: Resilient Growth but with Increasing Fragilities — U.S. real GDP grew at a 1.1% annualized rate over the first half of 2025, but excluding booming AI-related investment output contracted 0.1%, with non-AI investment weakening. The OECD identifies a correction in equity markets lifted by expectations of high AI returns as a key downside risk to its projections.
  • 2026 Outlook: The Year Ahead In 14 Sparks — Slowing US growth — attributed to trade frictions, immigration restrictions and risks from a K-shaped economy — combined with inflation stuck near 3% amounts to a stagflation environment, even as the medium-term outlook looks strong. Real business investment growth is concentrated in information processing equipment such as computers, data centers and software, while non-AI capital spending growth is roughly zero.
  • 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.

AI Summary. China produced 99% of the world's lithium iron phosphate battery cells and over 90% of their main components, and also dominates refining of lithium and graphite and production of cathodes and anodes. A defense analytics firm estimates U.S. military forces rely on Chinese supply chains for roughly 6,000 battery components across weapons programs.

Hiroko Tabuchi, Brad Plumer and Harry Stevens New York Times
Date Posted:

In 2024 China manufactured 99% of the world’s LFP (Lithium Iron Phosphate) cells and more than 90% of the primary components. Quietly, the Trump administration is allowing many Biden-era grants for domestic battery manufacturing to proceed.

How dependent are U.S. defense and AI systems on Chinese batteries?

Core argument: China produced 99% of the world's lithium iron phosphate battery cells in 2024 and more than 90% of the main components, with its dominance extending to refining lithium and graphite and making cathodes and anodes.

In 2024, China made 99% of the world’s LFP cells and more than 90% of the main components. That dominance extends to the refining of raw materials like lithium and graphite, as well as to fundamental components like cathodes and anodes that drive the movement of electrons within batteries. Currently, U.S. military forces rely on Chinese supply chains for some 6,000 individual battery components across weapons programs, according to Govini, a defense analytics firm. When President Trump came to office, his administration initially froze billions of dollars in Biden-era federal grants for battery manufacturing, lumping batteries in with electric vehicles, solar farms, wind turbines and other clean energy technologies Mr. Trump had sought to de-emphasize. The Energy Department has quietly allowed many Biden-era grants for battery makers to proceed. It also recently announced up to $500 million for battery materials and recycling projects. The administration has started investing in companies that develop battery components or critical minerals, including Eos, a next-generation battery company. As part of a trade deal, officials prodded Japan to promise to invest billions of dollars in U.S. battery manufacturing.

Takeaways by Macro Roundup® AI

  1. China produced 99% of the world's lithium iron phosphate battery cells in 2024 and more than 90% of the main components, with its dominance extending to refining lithium and graphite and making cathodes and anodes.
  2. U.S. military forces rely on Chinese supply chains for some 6,000 individual battery components across weapons programs, according to the defense analytics firm Govini.
  3. After initially freezing billions of dollars in Biden-era battery manufacturing grants, the Trump administration has allowed many to proceed, announced up to $500 million for battery materials and recycling projects, and prodded Japan to promise billions in U.S. battery manufacturing investment.

Related Articles:

  • US Efforts to Contain Xi’s Push for Tech Supremacy Are Faltering — Research by Bloomberg Economics and Bloomberg Intelligence finds that of 13 key technologies tracked, China has reached global leadership in five and is catching up in seven others, with clear leads in electric vehicles, automotive software and lithium battery technology. China still struggles to develop manufacturing processes for advanced semiconductors, the main focus of US export controls.
  • Why Every Country Needs To Master The Electric Tech Stack — Drones are the foundation of hard power in the early 21st century, so a country unable to produce them domestically is at a disadvantage. As electric motors overtake combustion engines as the core technology that makes machines move, the same supply chains and production processes used for electronics can also produce cars, drones, robots, and appliances.
  • The U.S. Is Forfeiting the Clean-Energy Race to China — China installed 277 gigawatts of wind and solar capacity in seven months, roughly four times the utility-scale additions U.S. federal analysts project for all power sources over a full year. Chinese firms' global market share in batteries and solar modules has reached 75% or higher, according to BloombergNEF.

AI Summary. The U.S. Navy is to build a new "Trump-class" battleship as the centerpiece of a planned "Golden Fleet," upgrading the Arleigh Burke-class destroyers that form the current fleet's workhorse. A new frigate based on the Coast Guard's Legend-class National Security Cutter will replace the canceled Constellation-class frigate.

Lara Seligman and Marcus Weisgerber Wall Street Journal
Date Posted:

The Navy’s planned “Golden Fleet” is falling into place, with a new Trump class of “battleships” that will replace the Navy’s Arleigh Burke-class destroyers, and a new class of frigates replacing the canceled Constellation class.

Is the Navy building a new class of battleship and frigate?

Core argument: President Trump said the Navy would build a new "Trump-class" battleship as the centerpiece of his vision for a "Golden Fleet," an upgrade to the Arleigh Burke-class destroyers that serve as the workhorse of the current fleet.

President Trump said the Navy would build a new “Trump-class” battleship, which will be the centerpiece of his vision for a new “Golden Fleet.” The new battleship will be an upgrade to the Navy’s Arleigh Burke-class destroyers, which are the workhorse of the current fleet and which Trump has compared unfavorably to rival navies, according to a U.S. official and another person familiar with the discussions. The new frigate will be based on the Coast Guard’s Legend-class National Security Cutter, which HII’s Ingalls Shipbuilding division builds in Pascagoula, Miss., and will replace the Constellation-class frigate that the Navy canceled last month after years of delays.

Takeaways by Macro Roundup® AI

  1. President Trump said the Navy would build a new "Trump-class" battleship as the centerpiece of his vision for a "Golden Fleet," an upgrade to the Arleigh Burke-class destroyers that serve as the workhorse of the current fleet.
  2. Trump has compared the Navy's Arleigh Burke-class destroyers unfavorably to rival navies, according to a U.S. official and another person familiar with the discussions.
  3. The Navy's new frigate will be based on the Coast Guard's Legend-class National Security Cutter, built by HII's Ingalls Shipbuilding division in Pascagoula, Miss., and will replace the Constellation-class frigate the Navy canceled last month after years of delays.

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  • Ship Wars — Shipyards tied to China's defense industrial base account for 15% of the country's active shipyards but 40% of commercial output by tonnage, with over 75% of their production built for firms outside China and Hong Kong. The authors argue these commercial revenues offset fixed costs and effectively subsidize China's naval expansion.
  • China’s Shipyards Are Ready for a Protracted War. America’s Aren’t — China produced more than half of the world's commercial shipbuilding output, while Europe accounts for about 5% and the US next to nothing, with most of the remainder built in South Korea and Japan. Analysts argue that in a protracted conflict China's wartime-scale yards could quickly accelerate production, replace lost ships, and repair damaged ones.

AI Summary. Pew Research Center polling finds that key measures of religiousness in the United States have held fairly steady, including the shares of adults identifying as Christian, with another religion, or with no religion, and those who pray daily, call religion very important, or attend services regularly. This stability follows a prolonged period of religious decline.

Gregory Smith Pew Research Center
Date Posted:

America’s religious composition remained stable between 2020 and 2025, with 62% of the population identifying with Christianity – down 2pp over that period – and 8% with other religions, up 1pp. Young adults today are less religious than their elders.

Has religious decline in America leveled off?

Core argument: Pew Research Center polling finds key measures of U.S. religiousness holding steady, with the shares of adults identifying with Christianity, with another religion, or with no religion all remaining fairly stable in the Center's latest polling.

Pew Research Center polling finds that key measures of religiousness are holding steady in the United States, continuing a period of relative stability that began about five years ago. The shares of U.S. adults who identify with Christianity, with another religion, or with no religion have all remained fairly stable in the Center’s latest polling. The percentages of Americans who say they pray every day, that religion is very important in their lives, and that they regularly attend religious services also have held fairly steady since 2020. The recent stability is striking because it comes after a prolonged period of religious decline.

Takeaways by Macro Roundup® AI

  1. Pew Research Center polling finds key measures of U.S. religiousness holding steady, with the shares of adults identifying with Christianity, with another religion, or with no religion all remaining fairly stable in the Center's latest polling.
  2. The percentages of Americans who say they pray every day, that religion is very important in their lives, and that they regularly attend religious services have held fairly steady since 2020, according to Pew Research Center.
  3. Pew Research Center notes that the stability in American religiousness follows a prolonged period of religious decline, with the current period of relative stability beginning about five years ago.

Related Articles:

  • Decline of Christianity in the U.S. Has Slowed, May Have Leveled Off — Survey data show 62% of U.S. adults identify as Christian, a 16-point decline from earlier readings, with Protestants at 40% and Catholics at 19%. Religiously unaffiliated adults — atheists, agnostics, and those saying "nothing in particular" — account for 29% of the population.
  • The Illusion of America’s Religious Revival — Secular identity has plateaued among young men while continuing to rise among young women, with 43% of young women now religiously unaffiliated versus 33% a decade earlier and almost no change among young men. The share of young women calling religion personally important fell from 82% to 57%, a steeper decline than among young men.
  • Religious ‘Nones’ in America: Who They Are and What They Believe — Pew survey data indicate about 28% of U.S. adults are religiously unaffiliated, identifying as atheist, agnostic, or "nothing in particular." Most of these adults believe in God or a higher power, rarely attend religious services, say religion does some harm while many also see some good, and reject the idea that science can explain everything.

AI Summary. A classic essay argues that the Roman world combined civil order and political stability with oppression, heavy taxation, persecution of dissenters, enslavement, and contempt for human life. It presents the teaching to render unto Caesar what is Caesar's and unto God what is God's as the assertion of a realm beyond the state's claim.

Vermont Royster Wall Street Journal
Date Posted:

Since 1949 the Wall Street Journal has run the late Vermont Royster’s “In Hoc Anno Domini” on Christmas Eve: “Stand fast therefore in the liberty wherewith Christ has made us free and be not entangled again with the yoke of bondage.”

Can civil order and stability coexist with oppression and contempt for life?

Core argument: The essay "In Hoc Anno Domini" describes a known world under a single state, Rome, ruled by one master, Tiberius Caesar, where Roman law enforced civil order and centurions maintained stability in government and society.

When Saul of Tarsus set out on his journey to Damascus the whole of the known world lay in bondage. There was one state, and it was Rome. There was one master for it all, and he was Tiberius Caesar. Everywhere there was civil order, for the arm of the Roman law was long. Everywhere there was stability, in government and in society, for the centurions saw that it was so. But everywhere there was something else, too. There was oppression -- for those who were not the friends of Tiberius Caesar. There was the tax gatherer to take the grain from the fields and the flax from the spindle to feed the legions or to fill the hungry treasury from which divine Caesar gave largess to the people. There was the impressor to find recruits for the circuses. There were executioners to quiet those whom the Emperor proscribed. What was a man for but to serve Caesar? There was the persecution of men who dared think differently, who heard strange voices or read strange manuscripts. There was enslavement of men whose tribes came not from Rome, disdain for those who did not have the familiar visage. And most of all, there was everywhere a contempt for human life. What, to the strong, was one man more or less in a crowded world? Then, of a sudden, there was a light in the world, and a man from Galilee saying, Render unto Caesar the things which are Caesar's and unto God the things that are God's.

Takeaways by Macro Roundup® AI

  1. The essay "In Hoc Anno Domini" describes a known world under a single state, Rome, ruled by one master, Tiberius Caesar, where Roman law enforced civil order and centurions maintained stability in government and society.
  2. Under Tiberius Caesar, the essay recounts, tax gatherers took grain from the fields and flax from the spindle to feed the legions and fill the treasury, impressors found recruits for the circuses, and executioners quieted those the Emperor proscribed.