Edward Conard

Top Ten New York Times Bestselling Author

  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Wednesday, January 28, 2026

AI Summary. Laffer curves estimated with a realistic tax base are flatter than those using simplified broad or narrow bases, implying smaller revenue gains from raising top tax rates and a lower revenue-maximizing top rate. The authors estimate federal individual income tax revenue peaks at a 47% top rate, yielding only 1.3% more revenue, about 0.1% of GDP.

Rachel Moore, Brandon Pecoraro and David Splinter Joint Committee on Taxation
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JCT calculations suggest that properly constructed individual income tax Laffer curves are flat over wide ranges. Modeling shifting across business types and interactions btw various taxes under 2022 law, they find revenue is ~ constant for top rates btw 37% and 55%.

How much revenue would raising top tax rates actually generate?

Core argument: A Laffer curve estimated with a tax calculator and the true tax base peaks at a top rate of 47%, yielding only 1.3% more federal individual income tax revenue, about 0.1% of GDP.

Laffer curves estimated with more realistic taxes are flatter, suggesting less potential revenue gains from top rate increases and a lower revenue-maximizing top rate. Standard simplifications miss meaningful behavioral margins such as shifting across tax bases and sectors. Interactions between federal individual income taxes and other taxes produce even flatter Laffer curves and smaller revenue gains from higher top rates. Panel A of Figure 2 shows how federal individual income tax revenues change as the top tax rate varies along the x-axis. With a broad base, total income enters the tax function as a single base, applying the top rate to all income even though much of it qualifies for lower preferential tax rates. With a narrow base, only wage income enters the tax function, which fails to apply the top tax rate to any capital income. The true tax base lies between the narrow and the broad base. The Laffer curve estimated using the tax calculator and true base reaches a more modest peak (only 1.3% more tax revenue) at a top tax rate of 47%. Notably, this additional federal income tax revenue is only about 0.1% of GDP. Relative to both the narrow and broad bases, the true base implies smaller potential revenue gains and a lower revenue-maximizing top tax rate.

Takeaways by Macro Roundup® AI

  1. A Laffer curve estimated with a tax calculator and the true tax base peaks at a top rate of 47%, yielding only 1.3% more federal individual income tax revenue, about 0.1% of GDP.
  2. The true tax base lies between a narrow base covering only wage income and a broad base applying the top rate to all income, and it implies smaller potential revenue gains and a lower revenue-maximizing top rate than either.
  3. Standard simplifications omit behavioral margins such as shifting across tax bases and sectors, and interactions between federal individual income taxes and other taxes produce flatter Laffer curves with smaller revenue gains from higher top rates.

Related Articles:

  • Taxing Top Wealth: Migration Responses and Their Aggregate Economic Implications — Swedish data show that when a wealth-taxed entrepreneur emigrates, employment at their businesses falls 33%, value-added 34%, tax payments 50%, and investment 21%, but 60% of closed firms are absorbed by other domestic companies. The authors estimate aggregate effects on employment and investment are small.
  • California’s Billionaire Tax Plan Will Backfire — California now draws more than 60% of its revenue from personal income taxes, compared with about 11% in the early 1950s when sales and use taxes supplied nearly 60%. The state's top 1% of taxpayers — roughly 170,000 filers — paid about 40% of personal income tax revenue, payments that depend heavily on unpredictable capital gains.
  • Ed Conard Debates Furman On “The Expected Value of Risk Taking” — A debate on U.S. fiscal policy argues that spending increases, rather than the tax increases needed to fund them, slow growth, and that higher taxes would reduce the expected value of America's innovative risk-taking. The argument holds that cutting debt below 100% of GDP is critical.

AI Summary. At age 30, 31% of Millennials still live with parents or roommates versus 19% of Boomers, and only 61% of Millennial household heads are married versus 77% of Boomers; the analysis attributes most of the 18-percentage-point home ownership gap (25% versus 43%) to these two differences. Among married household heads, the ownership gap narrows to 8 points.

Aziz Sunderji Home Economics
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60% of millennials who are married and living apart from their parents at age 30 own a home, compared to 68% of comparable baby boomers. At 30, 42% of millennials are married, versus 64% of boomers.

Do delayed household formation and marriage explain lower young-adult homeownership?

Core argument: Home ownership at age 30 is 25% for Millennials versus 43% for Boomers, an 18-point gap the analysis attributes largely to differences in household formation and marriage.

The diagram traces the path from birth to living arrangement at age 30 for Millennials and Boomers. It reveals two junctures where the generations diverged. First, household formation: 31% of Millennials at age 30 still live with parents or roommates, compared to just 19% of Boomers at the same age—a 12-percentage-point gap that immediately disqualifies Millennials from the ownership track. Second, marriage: among those who do form households, only 61% of Millennials are married by age 30, versus 77% of Boomers. These two factors—not leaving the nest and not marrying, at least by age 30—account for the bulk of the 18-point ownership gap (43% for Boomers vs. 25% for Millennials). Part of this comes down to shifting preferences and values, but stretched affordability is also an important driver. Strikingly, conditional on being a married household head, ownership rates are much closer: 68% of married Boomer heads owned at 30, compared to 60% of Millennials—an 8-point gap, far smaller than the headline 18-point difference.

Takeaways by Macro Roundup® AI

  1. Home ownership at age 30 is 25% for Millennials versus 43% for Boomers, an 18-point gap the analysis attributes largely to differences in household formation and marriage.
  2. Among Millennials at age 30, 31% still live with parents or roommates, compared with 19% of Boomers, a 12-point gap that excludes them from the ownership track.
  3. Among married household heads, ownership at age 30 is 60% for Millennials versus 68% for Boomers, an 8-point gap far smaller than the headline 18-point difference.

Related Articles:

AI Summary. Shortages of the most fuel-efficient aircraft engines have sent their market values soaring, and industry experts and executives expect prices to stay elevated even as manufacturers raise output and expand maintenance capacity. An Irish aircraft lessor reports two new engines sold separately as spares can equal as much as 80% of a new plane's value, versus 20-30% two decades ago.

Sylvia Pfeifer and Peter Campbell Financial Times
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Two decades ago, engines accounted for 20–30% of an aircraft’s value. That has risen to as much as 80%, according to a new report by lessor Avolon.

Will aircraft engine prices stay elevated despite rising production?

Core argument: Two new aircraft engines sold separately as spares can account for as much as 80% of a new aircraft's value, compared with 20–30% two decades ago, according to a report by Irish lessor Avolon.

Aircraft engine values have soared and are likely to remain elevated for the foreseeable future even as manufacturers boost output and expand critical maintenance capacity, warn industry experts and executives. Supply shortages of the industry’s most fuel-efficient aircraft engines have sent their market values soaring. In some cases, if sold separately as spares, two new engines can account for as much as 80% of the value of a new aircraft, according to a report by Irish lessor Avolon. Although engine values have been rising over the past few years, a pair of engines two decades ago would have accounted for 20-30% of an aircraft’s value. Engine constraints have become one of the biggest concerns for the industry as manufacturers have struggled to keep up with booming demand for Airbus and Boeing planes.

Takeaways by Macro Roundup® AI

  1. Two new aircraft engines sold separately as spares can account for as much as 80% of a new aircraft's value, compared with 20–30% two decades ago, according to a report by Irish lessor Avolon.
  2. Shortages of the industry's most fuel-efficient aircraft engines have sent their market values soaring, and industry experts and executives expect values to remain elevated even as manufacturers raise output and expand maintenance capacity.
  3. Engine constraints have become one of the biggest concerns for the aviation industry as manufacturers struggle to keep pace with booming demand for Airbus and Boeing planes.

Related Articles:

  • How Long Can Airbus Keep Its Edge Over Boeing? — Airbus's A320 family of single-aisle jets is poised to overtake Boeing's 737 as the most-delivered commercial aircraft in history, with 12,153 delivered since launch, according to aviation consultants Cirium. After years of a roughly even split, Airbus holds 61% of the single-aisle market by order backlog and 72% by deliveries, while Boeing leads in wide-body aircraft.
  • Boeing Has Started Working on a 737 MAX Replacement — Boeing's aircraft-development programs have struggled, with two fatal 737 MAX crashes leading to a global grounding and delays to new variants, the cancellation of a planned midsize jet, and a 777 upgrade years behind schedule. Rival Airbus has become the world's biggest plane maker by deliveries and order backlog.
  • Boeing Battles Brain Drain As Engineers Chase the Allure of Space — The average tenure of a Boeing engineer has fallen from 16.4 years to 12.6 years, according to data from the union representing 12,000 Boeing engineers, with tenure shortening in almost every age bracket. Analysts, recruiters and union officials describe this "brain drain" as a drag on operations that could make launching a new plane harder.

AI Summary. China's broad price gauge, the GDP deflator, has been negative since 2023, indicating weak domestic demand, with profits shrinking across industries from steel and electric vehicles to cosmetics and profit margins among publicly traded mainland firms at their lowest since 2009. Fixed-asset investment in homes, factories and roads fell for the first time on record.

Hannah Miao Wall Street Journal
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Chinese producer prices have been falling since 2023, and profit margins at publicly traded Chinese firms are the lowest since 2009. Due to Xi’s “deep-rooted philosophical objections to Western-style consumerism,” deflation will be hard to address.

Are falling prices squeezing profits and investment across China's economy?

Core argument: China's GDP deflator, a broad price gauge, has been negative since 2023, a sign of inadequate domestic demand.

[The rate of change in] China’s GDP deflator, a broad price gauge, has been negative since 2023, a sign of inadequate demand at home. Corporate filings show profits shrinking at companies in a wide range of industries, including steel, concrete, electric vehicles, robotics, condiments and cosmetics. Profit margins among publicly traded companies in China are at their lowest levels since 2009, according to a FactSet index of 5,000 mainland-domiciled firms. Fixed-asset investment—which tracks spending on assets such as homes, factories and roads—fell in 2025 for the first time on record. But involution is also the price to pay for Chinese leader Xi Jinping’s goal of industrial self-reliance and global leadership in advanced technologies, which has largely come at the expense of supporting consumers.

Takeaways by Macro Roundup® AI

  1. China's GDP deflator, a broad price gauge, has been negative since 2023, a sign of inadequate domestic demand.
  2. Profit margins among publicly traded Chinese companies stand at their lowest levels since 2009, according to a FactSet index of 5,000 mainland-domiciled firms, with corporate filings showing shrinking profits in steel, concrete, electric vehicles, robotics, condiments and cosmetics.
  3. China's fixed-asset investment, which tracks spending on assets such as homes, factories and roads, fell in 2025 for the first time on record, while Xi Jinping's goal of industrial self-reliance and leadership in advanced technologies has largely come at the expense of supporting consumers.

Related Articles:

  • 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.
  • 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.

Thursday, January 29, 2026

AI Summary. Federal Reserve rate changes affect short-term Treasuries, but long-term Treasury yields are driven more by expected inflation and real growth, according to the author's analysis. An "intrinsic" 10-year risk-free rate, calculated by adding actual inflation and real GDP growth, tracks the big historical moves in Treasury rates, standing at 5.10% against a 4.18% 10-year Treasury yield.

Aswath Damodaran Musings On Markets
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Damodaran’s “intrinsic rate,” the sum of real GDP growth and inflation, has broadly tracked the nominal 10-year Treasury rate since 1954. The 10-year yield of 4.18% at the start of 2026 is “within reach” of the 5.10% intrinsic rate.

What drives long-term Treasury yields more than central bank rate moves?

Core argument: The ten-year Treasury rate of 4.18% at the start of 2026 sits within reach of the intrinsic risk-free rate of 5.10%, estimated by summing 2025 inflation and real GDP growth.

The Fed’s much publicized forays into changing the Fed Funds rate has some effect on the short term treasuries, but long term treasuries are driven less by the Fed’s actions (or inaction) and more by expected inflation and real growth. I capture that relationship every year by estimating an intrinsic ten-year risk-free rate, obtained by summing together actual inflation for the year and real GDP growth and comparing it to the ten-year treasury bond rate. Over the seventy years of data in this graph, it is clear that the big movements in treasury rates are captured in the intrinsic risk-free rate, with higher inflation in the 1970s coinciding with the rise in the treasury rate, and the sustained low rates of the last decade largely in sync with the low inflation and anemic growth during the period. As you can see, after a stint (2021-25) where the intrinsic risk-free rate was well above the ten-year treasury rate, largely because of higher inflation, the treasury rate of 4.18%, at the start of 2026, is within reach of the intrinsic rate of 5.10%, obtained by adding inflation and real growth in 2025.

Takeaways by Macro Roundup® AI

  1. The ten-year Treasury rate of 4.18% at the start of 2026 sits within reach of the intrinsic risk-free rate of 5.10%, estimated by summing 2025 inflation and real GDP growth.
  2. Fed Funds rate changes affect short-term Treasuries, while long-term Treasury rates are driven more by expected inflation and real growth.
  3. Across seventy years of data, big movements in Treasury rates track the intrinsic risk-free rate, with 1970s inflation coinciding with rising rates and the last decade's low rates largely in sync with low inflation and anemic growth.

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 Fed and the Secular Decline in Interest Rates — The authors find that the long-run decline in US Treasury yields since 1980 is fully accounted for by movements in a narrow window around Federal Reserve policy meetings, while yield changes outside that window prove transitory. They suggest the Federal Reserve conveys information to markets about the long-run level of interest rates.
  • Prosecuting Powell Would Be a New Low With No Upside — A U.S. plan for federally controlled mortgage agencies Fannie Mae and Freddie Mac to buy $200bn of mortgage-backed bonds amounts to quantitative easing aimed at cutting mortgage costs, and reflects that the Federal Reserve cannot control the long-term yields driving mortgage rates through its overnight rate target. The announcement pushed the 30-year benchmark mortgage bond yield below 5%.

AI Summary. Oracle shares have fallen more than 50% from their record high, erasing about $463bn in market value, as investors grow cautious about artificial intelligence and the company's ties to OpenAI. The decline comes as major technology firms pledge billions for data centers, in some cases without a clear return on investment.

Carmen Reinicke Bloomberg
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Oracle’s share price has fallen more than 50% from its September 10th peak, driven by concerns about high CAPEX on data centers, debt issuance and Oracle’s links to Open AI.

Are investors growing cautious about AI spending and returns?

Core argument: Oracle shares have fallen more than 50% from last year's all-time high, erasing about $463 billion in market value from the record set on Sept. 10, as investors concerned about the AI trade and the company's OpenAI links exit the stock.

Oracle shares have fallen more than 50% from last year’s all-time high as investors concerned about the artificial intelligence trade and the company’s links to OpenAI flee the stock. The stock’s decline has erased about $463 billion in market value from a record hit on Sept. 10 after the company reported an impressive outlook for its cloud business that pointed to soaring demand for AI. The rally brought Oracle’s valuation to more than $933 billion, making it the 10th most valuable publicly-listed US company at the time. The swift decline in Oracle shares has been amplified by growing investor concern over AI as the biggest technology companies continue to pledge billions of dollars in capital expenditures to build out data centers, in some cases without a clear return on investment. Added to the mix are circular deals between OpenAI, a private company that’s not profitable, and companies such as Oracle and Nvidia.

Takeaways by Macro Roundup® AI

  1. Oracle shares have fallen more than 50% from last year's all-time high, erasing about $463 billion in market value from the record set on Sept. 10, as investors concerned about the AI trade and the company's OpenAI links exit the stock.
  2. Oracle's rally to its Sept. 10 record, following a cloud business outlook that pointed to soaring AI demand, lifted its valuation above $933 billion and made it the 10th most valuable publicly listed US company at the time.
  3. Oracle's decline has been amplified by investor concern that the biggest technology companies keep pledging billions of dollars in data center capital expenditures, in some cases without a clear return on investment, alongside circular deals between OpenAI, Oracle and Nvidia.

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.
  • Is It a Bubble? — Transformational technologies have historically generated excessive enthusiasm and investment, producing more infrastructure than needed, asset prices that prove too high, and losses for those funding them, while also accelerating adoption. AI enthusiasm is argued to fit this pattern, with debt financing having the potential to magnify the effects.
  • Investors Seek Protection From Risk Of AI Debt Bust — Trading volumes in credit default swaps — insurance-like contracts against debt defaults — tied to major US technology companies including Alphabet, Amazon, Broadcom, CoreWeave, Meta, Microsoft and Oracle have risen 90%, according to clearinghouse DTCC data. The increase is most pronounced for Oracle and CoreWeave, both raising billions in debt for data centre capacity.

AI Summary. U.S. life expectancy at birth reached a record high of 81.4 years for women and 76.5 years for men, following a drop of more than 26% in drug-overdose deaths, the largest year-over-year decline recorded by the federal government. The age-adjusted overall mortality rate fell nearly 4%, to 722.1 deaths per 100,000.

Jennifer Calfas Wall Street Journal
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American life expectancy at birth hit an all-time high of 79 years in 2024, as opioid deaths declined. Overall drug overdoses declined 26% btw 2023 and 2024, the largest year-over-year drop on record. Provisional data suggest the decline is ongoing.

Has falling drug-overdose deaths pushed U.S. life expectancy to a record high?

Core argument: U.S. drug-overdose deaths fell more than 26% between 2023 and 2024, the largest year-to-year drop recorded by the federal government, according to the Centers for Disease Control, with provisional data through August 2025 showing continued decline.

Life expectancy in the U.S. reached a record high in 2024 following a substantial decline of drug-overdose deaths. The average life expectancy at birth for women and men in 2024 increased to 81.4 years and 76.5 years, respectively The [Centers for Disease Control] reported that deaths related to drug overdose decreased by more than 26% between 2023 and 2024, marking the largest year-to-year drop in those types of fatalities recorded by the federal government. Provisional data of drug-overdose deaths in the U.S. through August 2025 show a continued decline in those fatalities. The overall mortality rate in the U.S., adjusted for age, dropped in 2024 by nearly 4%, from 750.5 deaths per 100,000 Americans in 2023 to a rate of 722.1 deaths per 100,000 in 2024. Death rates decreased across races and ethnicities. Heart disease, cancer and unintentional injuries remained the top-three leading causes of deaths, the agency said, while Covid-19 was no longer among the top 10 causes of death. Death by suicide was the 10th-leading cause of death in 2024.

Takeaways by Macro Roundup® AI

  1. U.S. drug-overdose deaths fell more than 26% between 2023 and 2024, the largest year-to-year drop recorded by the federal government, according to the Centers for Disease Control, with provisional data through August 2025 showing continued decline.
  2. U.S. life expectancy at birth reached a record high in 2024, rising to 81.4 years for women and 76.5 years for men.
  3. The age-adjusted U.S. mortality rate fell nearly 4% in 2024, from 750.5 to 722.1 deaths per 100,000, with decreases across races and ethnicities and Covid-19 no longer among the top 10 causes of death.

Related Articles:

  • Did The Illicit Fentanyl Trade Experience A Supply Shock? — The authors argue that a major disruption in the illicit fentanyl trade, possibly tied to Chinese enforcement actions against precursor chemical manufacture and export, coincided with sharp declines in overdose deaths in both the US and Canada. China reported removing 140,000 advertisements and 14 online platforms tied to synthetic drug and precursor suppliers.
  • Accounting for the Widening Mortality Gap Between American Adults With and Without a BA — The mortality gap between American adults with and without a four-year college degree widened across three periods—falling mortality for both with larger gains for graduates, then diverging, then rising faster for the less educated during the pandemic—reaching an 8.5-year difference in adult life expectancy. Americans with a degree, treated as a separate country, would rank just below Japan.
  • Explaining the Widening Divides in US Midlife Mortality: Is There a Smoking Gun? — The US life expectancy gap between people with and without a college degree widened from 2.6 years to 6.3 years over roughly three decades, while mortality inequality across counties rose 30%. Using county- and state-level data, the authors attribute a key role to smoking rates, with secondary roles for income, other health behaviors, and state policies.

AI Summary. Copper prices have surged past $14,500 a ton even as China, which accounts for about half of physical consumption, shows signs of weak demand and futures market pricing points to ample supplies. Investors are favoring metals tied to growth markets such as robotics and artificial intelligence, including copper, aluminum and tin.

Bloomberg Staff Bloomberg
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Copper traded above $14,500 a ton for the first time, driven by Chinese speculative trading. Copper has now risen 25% since the start of December.

Are copper prices rising despite weak demand and ample supply?

Core argument: Copper has climbed past $14,500 a ton, a surge that has come despite indications of weak demand in China, which accounts for about half of physical consumption of the metal.

Copper has long been a favorite of investors who see the energy transition and the growth of data centers driving demand. Still, the recent surge in prices has come in spite of indications of weak demand in China itself, which accounts for about half of physical consumption of the metal, and a widening contango on the [London Metal Exchange], an indication of ample supplies. Investors have been flocking in particular to metals needed in major growth markets. Tesla plans to spend $20 billion this year shifting resources to robotics, and AI has underscored investment prospects. Copper, aluminum and tin would all be beneficiaries.

Takeaways by Macro Roundup® AI

  1. Copper has climbed past $14,500 a ton, a surge that has come despite indications of weak demand in China, which accounts for about half of physical consumption of the metal.
  2. A widening contango on the London Metal Exchange indicates ample copper supplies, even as investors continue to favor the metal on expectations that the energy transition and data-center growth will drive demand.
  3. Tesla plans to spend $20 billion this year shifting resources to robotics, and AI has underscored investment prospects in metals needed in major growth markets, with copper, aluminum and tin all beneficiaries.

Related Articles:

  • Amazon Is Buying America’s First New Copper Output in More Than a Decade — 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.
  • 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.
  • 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. Central bank and other official-sector gold purchases fell to 863.3 tonnes, according to the World Gold Council, as high prices and the rising value of existing holdings damped further official buying. Investment demand for gold surged 84% to 2,175 tonnes, driven by exchange-traded fund inflows and demand for gold bars.

Leslie Hook Financial Times
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Central banks’ gold purchases – exclusive of Chinese official buying, which is unreported – declined 20% in 2025.

Are central banks buying less gold as investor demand surges?

Core argument: Investment demand for gold surged 84% to 2,175 tonnes, driven by exchange traded fund inflows and rising demand for gold bars, according to the World Gold Council.

Purchases by central banks and other institutions, such as sovereign wealth funds and government entities, fell to 863.3 tonnes last year, according to industry body the World Gold Council (WGC), as high prices and the swelling value of existing holdings damped demand for further buying by the official sector. However, investment demand for gold surged 84% to 2,175 tonnes compared with the previous year, driven by exchange traded fund inflows as well as rising demand for gold bars. Market participants believe China’s buying — much of which goes unreported and is not included in the WGC data — is even higher, once secret purchases are taken into account.

Takeaways by Macro Roundup® AI

  1. Investment demand for gold surged 84% to 2,175 tonnes, driven by exchange traded fund inflows and rising demand for gold bars, according to the World Gold Council.
  2. Purchases by central banks, sovereign wealth funds and other government entities fell to 863.3 tonnes, as high prices and the swelling value of existing holdings damped further official-sector buying.
  3. Market participants believe China's gold buying is higher than the World Gold Council's figures indicate, since much of it goes unreported and is excluded from the WGC data.

Related Articles:

  • Precious Comment: Raising Our Gold Price Forecast on Sticky Hedges — Analysts forecast a 17% rise in gold prices by end-2026, with emerging-market central bank buying averaging 60 tonnes contributing 14 percentage points and Western exchange-traded fund inflows on 50 basis points of Federal Reserve rate cuts adding 3. Risks are seen as skewed to the upside.
  • 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.
  • Everything You Need To Know About Gold — The historical relationship in which gold prices fall as real 10-year Treasury yields rise has broken down, since gold pays no interest and would normally become less attractive as rates rise. The author argues this reflects a "debasement trade," with investors seeking safe havens on fears governments will inflate away unsustainable public debt.