Edward Conard

Top Ten New York Times Bestselling Author

  • “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
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “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
  • “…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
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…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
  • “…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
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Thursday, January 15, 2026

AI Summary. Hourly wages at the 10th percentile have risen more since 2019 than wages at the median and 90th percentile, and this compression of wage inequality has largely persisted, strengthening when adjusted for worker age, education, and gender. Real wage growth at the bottom appears to have slowed more recently.

Arin Dube Arin's Substack
Date Posted:
Is Database:
Database

Dube reports that despite slowing real wage growth at the low end in 2025, the reduced inequality between the 10th percentile and the 50th and 90th percentiles due to wage gains “at the bottom” during the tight labor market of 2021–2022 largely remains.

Have wage gains at the bottom held up relative to the top?

Core argument: U.S. hourly wages at the 10th percentile have risen more since 2019 than at the 50th and 90th percentiles, and by 2024–2025 the bottom remains distinctly ahead in cumulative growth.

The figure [shows] the 10th, 50th, and 90th percentiles of hourly wages over time, each expressed relative to 2019. The real break comes after 2020: wages at the bottom rose substantially more than at the middle and the top. By 2024 and into 2025, the 10th percentile has pulled distinctly ahead of the median and the 90th percentile in cumulative growth since 2019 - [not only are] wages higher, but the lower tail has moved up more than the middle. The key question is whether the relative gains at the bottom that occurred in 2021/22 were given back. In the cross-sectional distribution, they largely weren’t. The bottom wage that rose sharply in 2021–2023 remains elevated relative to the middle and top through 2025. The sharp reduction in 50–10 and 90-10 inequality—driven by big increases at the bottom—has largely persisted. The second figure [1st in the gallery] adjusts wages for changes in demographic composition—age, education, and gender—so the percentiles better reflect shifts in the wage structure rather than shifts in the mix of workers. The adjustment doesn’t weaken the compression story; it strengthens it. At the same time, real wage growth during 2025 at the bottom seems to have slowed down, whether adjusted for composition or not. This kind of broad-based, compressive wage growth is unusual in recent U.S. history—rare from 1980 to 2016, aside from a late‑1990s burst.

Takeaways by Macro Roundup® AI

  1. U.S. hourly wages at the 10th percentile have risen more since 2019 than at the 50th and 90th percentiles, and by 2024–2025 the bottom remains distinctly ahead in cumulative growth.
  2. The sharp reduction in 50–10 and 90–10 wage inequality driven by large gains at the bottom in 2021–2023 has largely persisted through 2025 rather than being given back.
  3. Adjusting wages for age, education, and gender composition strengthens rather than weakens the compression pattern, though real wage growth at the bottom appears to have slowed during 2025 on both adjusted and unadjusted measures.

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.
  • U.S. Wages Still Rising Briskly, Employment Holding Up, and Inflation Still Sticky (Probably) — The U.S. job market looks no less healthy than a few months earlier: the rise in unemployment to 4.56% has coincided with more people actively looking for work, while the share of Americans aged 25-54 with a job held near 80.6%. Wages rising about 4% a year can explain inflation running about 1 percentage point above pre-pandemic rates.
  • The ‘No Hire’ Economy — US blue-collar employment shrank by more than 145k over the past year, with warehouse jobs down over 50k and construction job growth flat, while tech employment fell more than 19k. Unemployment rose 2.9 percentage points for teenagers and 1.6 points for young college graduates, versus 0.2 points for workers over 25.

AI Summary. New tax provisions are projected to cut household income taxes by roughly $220bn, or 0.7% of GDP, with a bit more than half of the after-tax income boost coming from retroactive changes and the rest from revised paycheck withholding. The authors estimate this lifts consumer spending by about $90bn, adding roughly 0.3% to GDP.

Michael Pugliese and Shannon Grein Wells Fargo
Date Posted:

Wells Fargo forecasts that tax policy changes made in the One Big Beautiful Bill will reduce household income taxes by ~$220B or .7% of GDP in 2026. They forecast that the tailwind will contribute .3% to what they expect will be 2026 GDP growth of 2.7%.

How much do new tax cuts boost consumer spending and GDP?

Core argument: OBBBA's new provisions are projected to cut household income taxes by roughly $220 billion in 2026, equal to 0.7% of GDP.

The total reduction in household income taxes in 2026 from OBBBA's new provisions will be roughly $220 billion, or 0.7% of GDP, with a bit more than half of the boost to after-tax income coming from retroactive changes for 2025 and the rest coming from the changes to withholding tables for 2026 paychecks. Relying on the broad research literature on the marginal propensity to consume, we ultimately expect the reduction in household income taxes to boost consumer spending by roughly $90 billion this year. This translates to a boost of around 0.3% to 2026 GDP.

Takeaways by Macro Roundup® AI

  1. OBBBA's new provisions are projected to cut household income taxes by roughly $220 billion in 2026, equal to 0.7% of GDP.
  2. A bit more than half of the boost to after-tax income comes from retroactive changes for 2025, with the remainder from changes to withholding tables for 2026 paychecks.
  3. Drawing on the research literature on the marginal propensity to consume, the lower household income taxes are expected to raise consumer spending by roughly $90 billion and 2026 GDP by around 0.3%.

Related Articles:

  • A Mystery in Fixed Income — Long-term interest rates have drifted higher than short-term rates and oil prices would predict, an unusual pattern during Federal Reserve rate-cutting cycles. Proposed explanations include investor concern about growing Treasury debt issuance or an effective increase in the Federal Reserve's 2% inflation target.
  • The Race Between Asset Supply and Asset Demand — The authors estimate that demand for assets has outpaced supply by roughly 400% of GDP versus 100%, making rising asset demand the leading contributor to falling interest rates. They project that debt sustainability requires fiscal consolidation exceeding 10% of GDP, though debt could reach 250% of GDP without raising interest rates.
  • 2026 Outlook: Tech Tonic — A Broadening Bull Market — 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.

AI Summary. A US tax law expanded deductions for state and local taxes, overtime, tips and seniors retroactively, but withholding tables adjusted only later, so workers get both higher take-home pay and refunds. One analyst estimates this injects nearly $200bn, lifting first-half annualized growth by up to half a percentage point.

Greg Ip Wall Street Journal
Date Posted:

This year, fiscal policy, monetary policy, and credit policy are all “dialed toward stimulus, reflecting a single-minded focus by Trump and congressional Republicans on faster economic growth. The consequences will come later.”

Will fiscal, regulatory, and monetary stimulus combine to accelerate growth?

Core argument: Donald Schneider of Piper Sandler estimates the tax-and-spending law Trump signed in July will inject nearly $200 billion into the economy, as higher take-home pay and refunds on cuts retroactive to the start of 2025 combine, lifting first-half annualized growth by up to half a percentage point.

The tax-and-spending bill Trump signed into law in July delivers new or expanded tax deductions, in particular for state and local taxes, overtime, tips and seniors. Although those tax cuts were retroactive to the start of 2025, tax withholding tables were only adjusted at the start of this year. This will generate a double-barreled stimulus. Many workers will see both higher take-home this month and a refund on last year’s taxes when they file their returns. Donald Schneider, a policy analyst at Piper Sandler, sees this injecting nearly $200 billion into the economy, enough to boost first half annualized growth up to half a percentage point. He also sees stronger investment from the bill’s provisions allowing businesses to fully write off capital spending. Capital requirements are on course to be loosened. Trump just ordered Fannie and Freddie to buy $200 billion in mortgage bonds, which could lower mortgage rates by 0.1 to 0.25 percentage point, according to UBS. Fed officials now see rates falling from their current range of 3.5% to 3.75% by a quarter of a point this year, which would leave rates roughly at “neutral.” Trump doesn’t want neutral, he wants stimulative, and is adamant that the next chairman cut rates by a lot. His two leading candidates have agreed. Perhaps they won’t cut to 1%, as Trump wants. But expect a dovish bias from both.

Takeaways by Macro Roundup® AI

  1. Donald Schneider of Piper Sandler estimates the tax-and-spending law Trump signed in July will inject nearly $200 billion into the economy, as higher take-home pay and refunds on cuts retroactive to the start of 2025 combine, lifting first-half annualized growth by up to half a percentage point.
  2. Trump ordered Fannie Mae and Freddie Mac to buy $200 billion in mortgage bonds, which UBS estimates could lower mortgage rates by 0.1 to 0.25 percentage point, while capital requirements are on course to be loosened.
  3. Fed officials see rates falling a quarter point this year from the current 3.5% to 3.75% range, leaving them roughly at neutral, while Trump presses for much deeper cuts and his two leading candidates for chairman have agreed.

Related Articles:

  • More on the “Neutral” Interest Rate (R*) — Private economists and Federal Reserve officials disagree about the level of the "neutral" interest rate—the inflation-adjusted short-term rate expected to prevail with the economy at full strength and stable inflation. Averaging model-based and market-based estimates puts the neutral real rate near 1.5%, and with expected inflation above the Federal Reserve's 2% target, the neutral nominal rate is correspondingly higher.
  • Trump Calls on Fannie and Freddie to Buy $200 Billion in Mortgage Bonds — Government-sponsored mortgage buyers Fannie Mae and Freddie Mac have been urged to purchase $200bn in mortgage bonds, roughly the room they have left under caps allowing each to hold up to $225bn of mortgage-backed securities against a combined $247bn held. The National Housing Conference estimates resuming such purchases could lower mortgage rates by a quarter-percentage point or more.
  • 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%.

AI Summary. The authors estimate the US dollar remains roughly 15% overvalued and argue a sharper depreciation could follow if US labor-market weakness forces deeper Federal Reserve rate cuts, particularly against a highly undervalued yen. They also flag a derating of US tech exceptionalism as a risk, since demand for US equities has helped fund the current account deficit.

Kamakshya Trivedi, Michael Cahill, Danny Suwanapruti, Teresa AlvesKaren Reichgott Fishman, et al. Goldman Sachs
Date Posted:

Goldman argues that despite the dollar’s “sharp” fall in 2025, it remains ~15% overvalued. They expect a “shallower” dollar descent in 2026 with the EUR/USD moving towards 1.25 from the current 1.16.

What could drive a sharper dollar depreciation from current overvaluation?

Core argument: The dollar remains roughly 15% overvalued even after its sharp 2025 fall, so a shift in concern from "jobless growth" to Sahm rule/recession risks that forces deeper Fed cuts would likely drive sharper depreciation, particularly against the highly undervalued yen.

While our baseline macro/market forecasts are consistent with a small dollar depreciation, a larger move is certainly possible. The Dollar remains ~15% overvalued even after the sharp fall in 2025, so a shift towards greater concern around the US labor market—from “jobless growth” to “Sahm rule/recession” risks—that forces the Fed to cut more deeply should see sharper depreciation, particularly versus the highly undervalued Yen. Deeper rate cuts could also come about without recession concerns if a reshaped Fed pushes further toward the bottom end of the range in the FOMC's dots. Markets have generally relaxed about institutional risks, but deeper USD downside tails, where optionality looks quite cheap again, could be in play if those institutional risks resurface and real policy rates in the US drop more abruptly than in the rest of the world. A different type of downside risk for the Dollar could come from a sharper derating in US tech exceptionalism. Demand for US equity exposure has been increasingly prominent in funding the US current account deficit and supporting the Dollar’s rich valuation in recent years. Even though we expect US productivity to benefit from the spread of AI in the years ahead, a “DeepSeek 2.0” moment may pose a significant challenge to the Dollar, beyond our baseline forecasts.

Takeaways by Macro Roundup® AI

  1. The dollar remains roughly 15% overvalued even after its sharp 2025 fall, so a shift in concern from "jobless growth" to Sahm rule/recession risks that forces deeper Fed cuts would likely drive sharper depreciation, particularly against the highly undervalued yen.
  2. Deeper US rate cuts could also arrive without recession concerns if a reshaped Fed pushes toward the bottom end of the FOMC dots, with deeper dollar downside tails in play should institutional risks resurface and US real policy rates fall more abruptly than elsewhere.
  3. Demand for US equity exposure has increasingly funded the US current account deficit and supported the dollar's rich valuation, so a "DeepSeek 2.0" moment derating US tech exceptionalism may pose a significant challenge to the dollar beyond baseline forecasts.

Related Articles:

  • 2026 Outlook: Tech Tonic — A Broadening Bull Market — 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.
  • The Debasement Trade Roars Back — 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.
  • Global Debt Report 2025 — About 60% of fixed-rate government debt in advanced economies maturing by 2027 — roughly $9tn — was issued before the recent interest-rate tightening, with weighted average yields below 2% versus projected 10-year rates near 3.6%, implying refinancing at nearly double the original cost. France, Spain, the UK, and the US face heightened vulnerability, with maturing debt exceeding 15% of GDP.

AI Summary. Amazon is buying copper from an Arizona project expected to yield 14,000 metric tons of copper cathode over four years, less than the tens of thousands of tons a single large data center requires for its electrical components. S&P Global estimates artificial intelligence will help lift copper demand 50% by 2040 while mining output dwindles, producing a 25% shortfall.

Ryan Dezember Wall Street Journal
Date Posted:

Amazon has signed a two-year deal with Rio Tinto to buy the output from the first new US copper mine in a decade – leveraging Rio’s new Nuton venture, “which uses bacteria and acid to extract copper from ore that was previously uneconomical to process.”

Will data center demand outstrip copper supply by 2040?

Core argument: S&P Global estimates AI will help lift copper demand 50% above current levels by 2040 while mining output dwindles, producing a 25% shortfall.

The Nuton copper will satisfy only a sliver of Amazon’s needs. The biggest data centers each require tens of thousands of metric tons of copper for all the wires, busbars, circuit boards, transformers and other electrical components housed there. The 14,000 metric tons of copper cathode that Rio expects the Arizona Nuton project to yield over four years wouldn’t be enough for one of those facilities. It takes more than two decades, on average, to bring a new mine from discovery to production. Although rising prices are likely to boost copper recycling and encourage engineers to cut the amount of the metal needed for various applications, a huge supply deficit is on the horizon. A study published last week by S&P Global estimates that AI will help lift copper demand 50% from current levels by 2040, while mining output dwindles, resulting in a 25% shortfall.

Takeaways by Macro Roundup® AI

  1. S&P Global estimates AI will help lift copper demand 50% above current levels by 2040 while mining output dwindles, producing a 25% shortfall.
  2. Rio Tinto's Arizona Nuton project, whose output Amazon is buying, is expected to yield 14,000 metric tons of copper cathode over four years, less than a single large data center requires.
  3. Bringing a new mine from discovery to production takes more than two decades on average, though rising copper prices are likely to boost recycling and encourage engineers to cut the metal needed per application.

Related Articles:

  • The World’s Copper Squeeze Is Set to Intensify on AI and Defense Spending, S&P Says — S&P Global projects copper demand will rise 50% to 42m tons by 2040 while production peaks near 33m tons in 2030 as ore quality declines at existing mines and new projects face permitting, financing and construction hurdles. The projected 10m-ton gap assumes recycled copper more than doubles to 10m tons.
  • The Hunt For Copper To Wire The AI Boom — Copper demand is being boosted by grid infrastructure for the green transition and by data centres for artificial intelligence, which miner Grupo México estimates require 27–33 tonnes of copper per megawatt, over twice the need of conventional data centres. BHP estimates copper used in data centres worldwide will grow sixfold by 2050.
  • Capital Is Making a Comeback — Tangible investment in property, factories and equipment fell from 12.5% to 8.5% of private gross domestic product, while intangible investment in intellectual property, software and process knowledge rose from about 11.5% to 16.75%. The author argues demand for tangible capital investment will now have to rise.

AI Summary. The US Department of Labor estimates the shipbuilding industry may need roughly 200,000 to 250,000 additional maritime workers in critical occupations such as welding, soldering, and front-line management to meet demand over the next decade, with a wider gap if demand for ships increases.

Brooke Weddle, Ryan Brukardt, and Wan-Lae Cochran McKinsey & Company
Date Posted:

The American shipbuilding industry will need to hire between 200,000 and 250,000 additional maritime workers over the next decade to meet projected commercial and military demand, Department of Labor data suggest.

How many additional workers does US shipbuilding need this decade?

Core argument: The US Department of Labor estimates the shipbuilding industry may need roughly 200,000 to 250,000 additional maritime workers over the next decade to meet demand in critical occupations.

According to the US Department of Labor, the shipbuilding industry may require about 200,000 to 250,000 additional maritime workers in critical occupations, such as welding, soldering, and front-line management, to satisfy demand over the next decade. If demand for ships increases, the labor gap will be even wider.

Takeaways by Macro Roundup® AI

  1. The US Department of Labor estimates the shipbuilding industry may need roughly 200,000 to 250,000 additional maritime workers over the next decade to meet demand in critical occupations.
  2. Welding, soldering, and front-line management are among the critical shipbuilding occupations cited in the US Department of Labor's assessment of maritime workforce needs.
  3. Increased demand for ships would widen the shipbuilding labor gap beyond the 200,000 to 250,000 additional workers projected.

Related Articles:

  • U.S. Shipyard Key to Trump’s American Revival Is Already Too Busy — South Korea's Hanwha Ocean, which bought the Philadelphia Shipyard, has pledged $5bn in upgrades and aims to produce up to 20 ships a year there, up from one or two recently, using automation and robotics from its South Korean operations. It is in talks with the Pentagon over potential vessel deals.
  • 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.
  • How South Korea’s Shipyards Could Save the US Navy — US shipyards had just five commercial ships under construction compared with 1,749 in China, and China's naval fleet is projected to grow from 370 to 475 vessels in a decade versus 297 to between 305 and 317 for the US Navy, whose major shipbuilding programs are behind schedule.

Friday, January 16, 2026

AI Summary. China's housing market has yet to find a bottom, with a small but growing number of households in negative home equity and continued adverse spillovers to local government finances and infrastructure spending. Consumer spending lags as falling home prices erode household balance sheets and a weak labor market yields slow income growth.

Andrew Tilton, Andrew Boak, Goohoon Kwon, Akira Otani, et al. Goldman Sachs
Date Posted:

Five years after China’s housing starts peaked in late 2020, they have not begun to recover; by contrast, US starts peaked in early 2006, with the trough in 2009. Chinese domestic demand is weak, the labor market is tepid, and inflation is below target.

Is China's housing market still weighing on consumer spending?

Core argument: China's housing market has yet to find a bottom five years after the "three red lines" and related restrictions were imposed, though the pace of decline is now more gradual.

Housing is yet to find a bottom five years after the imposition of the “three red lines” and other restrictions--while the pace of decline is more gradual now, a small but growing number of households are in a negative home equity position, and adverse spillovers to local government finances and infrastructure spending continue to play out. Consumer spending is lagging as home price declines erode household balance sheets, a weak labor market is providing only slow income growth, and the boost from government trade-in programs has peaked.

Takeaways by Macro Roundup® AI

  1. China's housing market has yet to find a bottom five years after the "three red lines" and related restrictions were imposed, though the pace of decline is now more gradual.
  2. A small but growing number of Chinese households are in negative home equity, while adverse spillovers from housing to local government finances and infrastructure spending continue to play out.
  3. Chinese consumer spending is lagging as home price declines erode household balance sheets, a weak labor market delivers only slow income growth, and the boost from government trade-in programs has peaked.

Related Articles:

  • China’s Economy: Rightsizing 2025, Looking Ahead to 2026 — The authors argue China's official growth figures are inconsistent with ten consecutive quarters of deflation, estimating that real GDP is around 11% below official levels, with most of the adjustment in investment. That would imply a drop of roughly 9 percentage points in China's share of global investment, helping explain its export surge.
  • 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. The cyclically adjusted price-earnings ratio, which divides stock prices by the average of the past 10 years of inflation-adjusted earnings to smooth business-cycle swings, stands near its highest level since 1880. Because it uses a decade of earnings rather than one year, it is a gauge of sustainable earnings power.

Torsten Sløk Apollo
Date Posted:

With CAPE, the cyclically adjusted price earnings ratio, ~40, equity valuations are at their highest level since 1880, with the one exception of 2000 prior to the dot-com crash.

Are stock valuations near their highest levels on record?

Core argument: The cyclically adjusted price earnings ratio, or Shiller P/E, shows equity valuations near their highest levels since 1880.

The cyclically adjusted price earnings ratio, also known as the Shiller P/E, is a stock market valuation measure that divides the current stock price by the average of the last 10 years’ inflation-adjusted earnings, thereby smoothing out business cycle volatility to assess long-term over/undervaluation and predict future returns. It provides a better gauge of sustainable earnings power than the traditional P/E ratio, which uses only one year’s earnings. The latest reading shows that equity valuations are near the highest levels since 1880.

Takeaways by Macro Roundup® AI

  1. The cyclically adjusted price earnings ratio, or Shiller P/E, shows equity valuations near their highest levels since 1880.
  2. The Shiller P/E divides the current stock price by the average of the past 10 years' inflation-adjusted earnings, smoothing business cycle volatility to assess long-term over- or undervaluation and predict future returns.
  3. By using a decade of earnings rather than a single year, the Shiller P/E provides a better gauge of sustainable earnings power than the traditional price earnings ratio.

Related Articles:

  • Smothering Heights — The four largest cloud computing firms are devoting rising shares of revenue to capital spending and research, with Meta's combined share reaching 70%. Unlike past investment booms, this one has been financed mostly from internal cash flow: 28 direct AI stocks make up 50% of S&P 500 market value but just 5% of its net debt.
  • 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.
  • 2026 Outlook: Tech Tonic — A Broadening Bull Market — 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.

AI Summary. Foreign holdings of US Treasuries rose $112.8bn to a record $9.36tn, a figure reflecting both net purchases and valuation changes, according to US Treasury Department data. Increases in Norwegian, Canadian and Saudi holdings offset a $6.1bn decline in China's stockpile to $682.6bn, its lowest since 2008.

Chris Anstey and Anya Andrianova Bloomberg
Date Posted:
Is Database:
Database

Foreign holdings of Treasuries hit a record high of $9.36T in November. Official Chinese holdings of Treasuries dropped $6.1B. However, holdings in Belgium – which include Chinese custodial accounts – rose $12.6B.

Are foreign holdings of US Treasuries rising to record levels?

Core argument: Foreign holdings of US Treasuries rose $112.8 billion in November to a record $9.36 trillion, a figure that reflects both net sales and valuation changes, according to Treasury Department data.

Overseas holdings of US Treasuries advanced in November to the highest level on record, with increases in Norwegian, Canadian and Saudi Arabian stockpiles helping offset another monthly drop in China’s total. Overall foreign holdings rose by $112.8 billion, to $9.36 trillion, Treasury Department data showed on Thursday. The figure represents both net sales and valuation changes. A Bloomberg index of the US Treasury market showed a fourth straight monthly advance for November. China’s stockpile of Treasuries, the third largest, dropped by $6.1 billion in November from the previous month, to $682.6 — the lowest level since 2008. Belgium, whose holdings include Chinese custodial accounts according to market analysts, saw its holdings go up by $12.6 billion, to $481 billion.

Takeaways by Macro Roundup® AI

  1. Foreign holdings of US Treasuries rose $112.8 billion in November to a record $9.36 trillion, a figure that reflects both net sales and valuation changes, according to Treasury Department data.
  2. China's Treasury holdings, the third largest, fell $6.1 billion in November to $682.6 billion, the lowest level since 2008, while increases in Norwegian, Canadian and Saudi Arabian stockpiles helped offset the decline.
  3. Belgium, whose holdings include Chinese custodial accounts according to market analysts, increased its Treasury holdings by $12.6 billion to $481 billion in November.

Related Articles:

  • Long-Maturity Treasuries Fall After Market’s Best Year in Five — Long-maturity US Treasuries have come under pressure as investors weigh the potential for further Federal Reserve interest-rate cuts to stoke inflation, following an annual return of more than 6% on a Bloomberg index tracking the sector. A measure of expected US bond-market volatility has slumped to multi-year lows.
  • The Race Between Asset Supply and Asset Demand — The authors estimate that demand for assets has outpaced supply by roughly 400% of GDP versus 100%, making rising asset demand the leading contributor to falling interest rates. They project that debt sustainability requires fiscal consolidation exceeding 10% of GDP, though debt could reach 250% of GDP without raising interest rates.
  • A Mystery in Fixed Income — Long-term interest rates have drifted higher than short-term rates and oil prices would predict, an unusual pattern during Federal Reserve rate-cutting cycles. Proposed explanations include investor concern about growing Treasury debt issuance or an effective increase in the Federal Reserve's 2% inflation target.

AI Summary. The article argues that diversity, equity, and inclusion mandates spread across the U.S. military, including a memorandum setting numerical targets by race and sex for Air Force officer applicants. It reports that at the U.S. Naval Academy, Black applicants in the fourth score decile were admitted at higher rates than white applicants in the eighth.

Mike Gallagher and Kevin Wallsten Wall Street Journal
Date Posted:
Is Database:
Database

Due to quotas resulting from a Biden DEI initiative, “Black [Naval Academy] applicants scoring in the fourth decile had an admission rate higher than that of whites in the eighth decile.” Gallagher and Wallsten argue that this hurt military recruitment.

Did diversity mandates reshape military recruitment and academy admissions?

Core argument: Black applicants to the U.S. Naval Academy scoring in the fourth decile had a higher admission rate than white applicants in the eighth decile.

Mr. Biden issued an executive order embedding “diversity, equity, inclusion, and accessibility” across “all parts of the Federal workforce.” Defense Secretary Lloyd Austin took the unprecedented step of ordering a “stand-down” to combat “extremism” in the armed forces. By the time an independent report commissioned by the Pentagon found these concerns to be baseless, they had already formed the ideological permission structure for a DEI crusade. In 2022, Gen. C.Q. Brown (later promoted to chairman of the Joint Chiefs of Staff) issued a memorandum that set numerical quotas for everyone from white males to Pacific Islander females among commissioned officer applicants to the Air Force. Racial discrimination likewise distorted admissions to the U.S. Naval Academy. Black applicants scoring in the fourth decile had an admission rate higher than that of whites in the eighth decile.

Takeaways by Macro Roundup® AI

  1. Black applicants to the U.S. Naval Academy scoring in the fourth decile had a higher admission rate than white applicants in the eighth decile.
  2. Gen. C.Q. Brown, later promoted to chairman of the Joint Chiefs of Staff, issued a 2022 memorandum setting numerical quotas for commissioned officer applicants to the Air Force, ranging from white males to Pacific Islander females.
  3. An independent report commissioned by the Pentagon found baseless the extremism concerns behind Defense Secretary Lloyd Austin's ordered military "stand-down.".

Related Articles:

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  • 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.
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AI Summary. A falling US birth rate is projected to shrink the pool of college-age Americans, leaving schools with empty classrooms. Many smaller, lesser-known colleges are already firing professors, cutting liberal arts courses in favor of science and technology programs, or closing entirely.

Elizabeth Rembert, Amanda Albright and Marie Patino Bloomberg
Date Posted:
Is Database:
Database

As America’s demographics roll over, smaller public and private liberal arts colleges have “already hit the precipice.” Btw 2003 and 2024, more than 100 public campuses closed, and ~ 2/3 of private for-profit colleges have shut down since the 2010s.

How is a falling birth rate reshaping American colleges?

Core argument: The US pool of college-aged Americans is expected to shrink after 2025, pushing schools toward a "demographic cliff" in which a steadily dropping population of people in their late teens and early 20s leaves desks and classrooms empty.

The country’s tumbling birth rate is pushing schools toward a “demographic cliff,” where a steadily dropping population of people in their late teens and early 20s will leave desks and classrooms empty. Many smaller, lesser-known schools have already hit the precipice. They’re firing professors, paring back liberal arts courses in favor of STEM — or closing altogether. Others will likely reach the cliff in the next few years. Although it has plunged since the 1950s, the US birth rate ticked upward slightly before the 2008 financial crisis, and that brief demographic boost has kept enrollment at larger schools afloat. But the nationwide pool of college-aged Americans is expected to shrink after 2025. The financial pressure will be relentless. “If colleges were facing a stark decline in one or two cohorts, higher ed could likely say, ‘Well, we could admit a few additional students and tighten our belts to muddle through,’” said Nathan Grawe, an economics professor at Carleton College in Minnesota, who has written books about education and demographics. “But it’s one year after another of contraction, of ratcheting up the pressure.”

Takeaways by Macro Roundup® AI

  1. The US pool of college-aged Americans is expected to shrink after 2025, pushing schools toward a "demographic cliff" in which a steadily dropping population of people in their late teens and early 20s leaves desks and classrooms empty.
  2. Many smaller, lesser-known US colleges have already reached the precipice, firing professors, paring back liberal arts courses in favor of STEM, or closing altogether, with others likely to reach it in the next few years.
  3. Carleton College economics professor Nathan Grawe argues that higher education could muddle through a decline in one or two cohorts by admitting a few additional students and tightening belts, but faces one year after another of contraction.

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  • Do Adults Have the Skills They Need to Thrive in a Changing World? — An international assessment of adult skills describes numeracy proficiency levels ranging from counting objects and adding small whole numbers at the lowest level, to extracting information from tables and graphs and performing basic arithmetic with money and percentages at Level 1, up to analysing complex mathematical information and critically evaluating whether data support a claim at Level 5.
  • Changes in the College Mobility Pipeline Since 1900 — Students from the bottom third of parental income now earn less than half the college enrollment wage premium of top-third students. The authors attribute this mainly to the rising relative value of research universities, lower-income students' diversion to community and for-profit colleges, and their shift from computer science and engineering into humanities.