Edward Conard

Top Ten New York Times Bestselling Author

  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
  • “…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
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…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
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Tuesday, June 9, 2026

AI Summary. An analysis of U.S. counties estimates that where wages grew faster than prices, voters supported the incumbent party more, while counties with larger real wage losses than average shifted more toward the opposition. A one-standard-deviation larger real wage loss is associated with shifts of roughly 0.10 and 0.19 percentage points in vote share and margin.

Juan Felipe Riaño and Francesco Trebbi National Bureau of Economic Research
Date Posted:

Given state fixed effects, demographics, and local inflation, a county whose real wage loss was 1SD > that of the mean county shifted its Presidential vote in 2024 towards the GOP by ~ 0.1pp in vote share and ~0.19pp in margin. Inflation per se was not “punished.”

Do voters punish incumbents for real wage losses rather than inflation?

Core argument: Using total local inflation to deflate wages, the estimated coefficient on real wage growth is −0.052 for county vote-share change and −0.048 for margin change, and is negative in every column of Table 3.

Table 3 presents estimates that decompose the economic environment into the wage–price gap G(k) and nominal price growth ∆P(k). Across vote-share and margin outcomes, the coefficient on real wage growth is negative in every column. With total [local] inflation used as the deflator of wages, the estimates are −0.052 for vote-share change and −0.048 for margin change. This sign is consistent with a basic retrospective accountability intuition applied to real income: counties where wages outpaced prices more strongly (higher real wage growth) tended to support the incumbent party more and shift less toward the opposition party. A county whose standardized real wage loss is one standard deviation larger than that of the mean county is predicted to shift toward the Republican ticket by 0.052 standard deviations in vote share change and 0.048 standard deviations in margin change (total-inflation column), or approximately 0.10 and 0.19 percentage points, respectively. Thus, among counties that lost real purchasing power on average, those that lost more relative to the mean shifted more strongly toward the Republican party, consistent with retrospective “punish-the-incumbent” voting.

Takeaways by Macro Roundup® AI

  1. Using total local inflation to deflate wages, the estimated coefficient on real wage growth is −0.052 for county vote-share change and −0.048 for margin change, and is negative in every column of Table 3.
  2. A county whose standardized real wage loss exceeds the mean county's by one standard deviation is predicted to shift toward the Republican ticket by 0.052 standard deviations in vote-share change and 0.048 in margin change, roughly 0.10 and 0.19 percentage points.
  3. Counties where wages outpaced prices more strongly tended to support the incumbent party more and shift less toward the opposition party, a pattern consistent with retrospective "punish-the-incumbent" voting on real income.

Related Articles:

  • Real Wages Start To Shrink In Developed Countries — US annual inflation of 3.8% outpaced average hourly earnings growth of 3.6%, leaving prices rising faster than pay for the first time in two years, while Eurozone workers face a fresh energy-driven setback. JPMorgan attributes the real wage decline to Middle East conflict and expects growth to resume if energy prices retreat.
  • US Consumer Sentiment Slides to Record Low on Price Concerns — The University of Michigan's consumer sentiment index fell 5 points to 44.8, a record low and weaker than all economist projections in a Bloomberg survey. Consumers expect prices to rise 3.9% annually over the next five to 10 years, up from 3.5%, and 4.8% over the coming year.
  • The Record Divide Between Corporate Profits and Worker Pay — Labor's share of gross domestic income fell to 51%, the lowest since records began in 1947, while profits' share rose to 12.1%, the highest since 1950. Inflation-adjusted hourly wages are up 3% since the end of 2019, compared with a 50% rise in profits.

AI Summary. The post-World War II productivity boom, which doubled real wages and living standards in a generation, came largely from technologies that already existed decades earlier rather than radical new inventions. It was followed by sluggish productivity growth from 1973 to 1995, then an information-technology boom that lasted roughly a decade before measured productivity growth slowed again.

Paul Krugman Krugman Wonks Out
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Krugman highlights the “Solow Paradox.” The highest TFP growth in the postwar US took place btw 1948–73, “an era of continuity” based on pre-existing technologies, whereas later periods with much greater technological ferment saw far less growth.

Do productivity booms come from existing technologies rather than new inventions?

Core argument: The quarter-century postwar boom in total factor productivity doubled real wages and living standards in a generation, yet the U.S. economy in 1963 was still achieving rapid gains from a technological suite that existed in 1913, what Peter Drucker in 1969 called an "age of continuity.".

There was an extraordinary, quarter-century-long boom in total factor productivity after World War II. Real wages and living standards doubled in a generation. It’s reasonable to think that this era of unprecedented economic progress must have been driven by radical new technologies that transformed the economy. Remarkably, however, it wasn’t. As the great management theorist Peter Drucker observed in 1969, the postwar economic miracle took place in an “age of continuity.” The U.S. economy in, say, 1963 was still achieving rapid productivity gains from a technological suite that already existed in 1913. This was followed by two-plus decades of very sluggish progress, the era of the “Solow paradox” — a combination of highly visible new technologies but disappointing economic payoff. Then came the IT boom that began circa 1995 but petered out around a decade later. Despite widespread perceptions that the productivity drought of 1973-1995 was over, the tech boom only lasted around a decade, after which productivity growth, at least as measured, once again slowed to a crawl.

Takeaways by Macro Roundup® AI

  1. The quarter-century postwar boom in total factor productivity doubled real wages and living standards in a generation, yet the U.S. economy in 1963 was still achieving rapid gains from a technological suite that existed in 1913, what Peter Drucker in 1969 called an "age of continuity.".
  2. The 1973–1995 "Solow paradox" era combined highly visible new technologies with disappointing economic payoff, producing two-plus decades of sluggish productivity progress.
  3. The IT boom beginning around 1995 lasted roughly a decade before measured productivity growth slowed to a crawl again, despite widespread perceptions that the earlier productivity drought had ended.

Related Articles:

  • Have We Entered an Era of High Productivity Growth? — Labor productivity has grown solidly while the San Francisco Federal Reserve's total factor productivity index, which adjusts for the equipment and technology workers use, has grown modestly, suggesting gains so far reflect better tools rather than broader advances. A regime-switching model puts the probability of a high-productivity regime at 57% using labor productivity and 21% using total factor productivity.
  • America Is Experiencing A Productivity Miracle — America's post-2019 productivity acceleration came largely from professional services and management—about 10% of output and heavy users rather than producers of new technology—and from oil and gas. The information industry grew productivity around 6% annually, no faster than its 2000-19 average, with its output share steady at 5.3–5.5%.
  • Attention (And Money) Is All You Need: Why Universities Are Struggling to Keep AI Talent — The annual compensation gap between top industry and academic artificial intelligence researchers widened from roughly $294,000 to $1.5m, coinciding with accelerating academic out-migration toward large incumbent technology firms. Researchers who move to industry cut paper production by about 63% while increasing patent filings nearly sixfold, consistent with a shift from open science toward proprietary innovation.

AI Summary. Alphabet, Microsoft, Amazon, Meta and Oracle are projecting $700bn in capital spending in 2026, with Bain & Company estimating the tech industry must generate $2tn in annual AI revenue to justify current data centre spending trends. Electrical equipment suppliers describe AI data centres as a core growth driver.

Clara Murray Financial Times
Date Posted:

According to an FT analysis, more than 200 public firms linked to the AI buildout outperformed the MSCI, which had risen ~21% y/y as of June 9. The firms are largely industrial companies, ranging from Caterpillar, to glass maker Corning, to GE Vernova.

Are electrical equipment suppliers benefiting from AI data center spending?

Core argument: Alphabet, Microsoft, Amazon, Meta and Oracle are projecting $700bn in combined capital spending in 2026 alone, raising questions over whether the investment wave can last if demand from the small number of companies driving the build-out slows.

Alphabet, Microsoft, Amazon, Meta and Oracle [are] projecting $700bn in capital spending in 2026 alone. Questions are being raised over whether the wave of investment can last — particularly if demand from the relatively small number of companies driving the build-out slows. Bain & Company has estimated that the tech industry must generate $2tn in AI revenue per year to justify current data centre spending trends. Schneider Electric told the FT AI data centres were a “core growth driver” for the company, while Siemens’ head of data centres Ciaran Flanagan said AI demand was a “long-term, structural growth trend rather than a short-term cycle,” adding that its data centre business grew 40% in 2025.

Takeaways by Macro Roundup® AI

  1. Alphabet, Microsoft, Amazon, Meta and Oracle are projecting $700bn in combined capital spending in 2026 alone, raising questions over whether the investment wave can last if demand from the small number of companies driving the build-out slows.
  2. Bain & Company estimates the tech industry must generate $2tn in AI revenue per year to justify current data centre spending trends.
  3. Siemens' head of data centres Ciaran Flanagan called AI demand a "long-term, structural growth trend rather than a short-term cycle," noting Siemens' data centre business grew 40% in 2025, while Schneider Electric called AI data centres a "core growth driver.".

Related Articles:

  • How Much Is Donald Trump Costing America’s Economy? — Excluding artificial-intelligence-related categories, US non-residential fixed investment has contracted at roughly a 3% annual rate over the past year, versus average growth above 5% in the prior decade, running about $130bn below trend and cutting GDP growth by roughly 0.4 percentage points. Credit remains plentiful, with tight corporate bond spreads.
  • The Macro Implications of the AI Capex Boom — Artificial intelligence capital spending is estimated to add roughly 1.4 percentage points to US growth in one year and about 1.5 points the next, comparable to business investment's contribution during the tech bubble. A material part of that estimate reflects profits at Nvidia and a few other chipmakers that are unlikely to be recycled back into the economy.
  • 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 author argues that inventory drawdowns temporarily masked the size of an oil supply shortfall, and that as stockpiles deplete the effective shortfall rises toward its full extent. On this view prices could climb toward the top of a projected 60–80% range but should not set new highs, since inventory depletion leaves the underlying supply shock unchanged.

Robin Brooks Robin Brooks Substack
Date Posted:

Since inventories cushioned the oil shock more than Brooks first assumed, the initial supply shortfall was smaller. As stocks deplete, prices may move from the bottom to the top of his 60–80% range, but with the underlying shock unchanged, not further.

Does inventory depletion push oil prices to new highs?

Core argument: Oil prices sit at the bottom of the author's 60–80% range, which could rise toward the top end as inventories deplete, though the author sees no reason for new highs.

All that’s really going on is that the initial supply shortfall was less than the ten million barrels I assumed at the time (due to inventories being run down), while it’s now - as stockpiles deplete - rising towards that. Nothing about the upper bound for oil prices has changed and of course it shouldn’t. The underlying supply shock is the same, it’s just that a temporary source of relief is ending. We’re currently at the bottom of my 60 to 80% range. I can see how we rise towards the top end of this range as inventories fall away, but I see no reason for us to make new highs. Inventory depletion changes nothing about the underlying shock and so there shouldn’t be new highs.

Takeaways by Macro Roundup® AI

  1. Oil prices sit at the bottom of the author's 60–80% range, which could rise toward the top end as inventories deplete, though the author sees no reason for new highs.
  2. The initial supply shortfall was smaller than the assumed ten million barrels because inventories were run down, and it is now rising toward that figure as stockpiles deplete.
  3. Inventory depletion leaves the underlying oil supply shock unchanged and ends only a temporary source of relief, so the upper bound for oil prices is unchanged.

Related Articles:

  • Global Market Views: Shortages — A ceasefire with Iran and reduced risk of extreme downside outcomes let markets compress risk premia, with US equities, high-carry and commodity currencies, and emerging markets recovering even as oil prices and yields stayed elevated. Shortages in commodities and the artificial intelligence supply chain are driving capital flows, pointing to higher volatility alongside further equity gains.
  • Shifting Conclusions From The Crises Of The Past 30 Years — Past financial crises taught countries to accumulate US Treasuries, while war-related financial sanctions taught them to accumulate gold; the author argues a Strait of Hormuz crisis will push countries to stockpile industrial commodities, energy and food while reinvesting in their own power grids. Funding this would drain liquidity from global financial markets for years.
  • You Can’t Print Molecules — Rebuilding after a disruption to a key shipping strait would require governments to finance defense, strategic reserves, domestic energy production, and infrastructure at the same time that inflation expectations are raising funding costs. The author argues capital will rotate out of asset-light sectors that thrived on open sea lanes and cheap energy into asset-heavy physical ones.

AI Summary. The author argues the US is maintaining an illusion of abundance by drawing down oil inventories rather than adding supply: the Strategic Petroleum Reserve has fallen from above 415m to roughly 357m barrels and Cushing storage from 33m to about 24.5m, with gasoline stocks drawing for 15 straight weeks.

Jeff Currie Carlyle
Date Posted:

Currie argues that the increase in US energy exports is suppressing “the very price signal that would trigger the investment response the market needs” to increase supply. Without an opening of Hormuz in the near term, he forecast a non-linear repricing.

Is US oil abundance being sustained by drawing down inventories?

Core argument: The Strategic Petroleum Reserve has fallen from above 415 million barrels in March to roughly 357 million, on a trajectory reaching operational minimums by early autumn.

The United States is cashing out its insurance policy in order to maintain the illusion of abundance. The SPR has fallen from above 415 million barrels in March to approximately 357 million today, on a trajectory reaching operational minimums by early autumn. Cushing[2] has declined from 33 to roughly 24.5 million barrels, weeks from nearing the floor below which the futures settlement mechanism begins to break down. Commercial crude inventories have erased their entire 2026 build in five weeks. Gasoline stocks have drawn for fifteen consecutive weeks. Diesel stocks are near critical levels before the summer driving season. This is not supply responding to price. It is inventory responding to price. And inventory, unlike production, has a floor.

Takeaways by Macro Roundup® AI

  1. The Strategic Petroleum Reserve has fallen from above 415 million barrels in March to roughly 357 million, on a trajectory reaching operational minimums by early autumn.
  2. Cushing inventories have declined from 33 million to roughly 24.5 million barrels, weeks from nearing the floor below which the futures settlement mechanism begins to break down.
  3. Commercial crude inventories have erased their entire 2026 build in five weeks, gasoline stocks have drawn for fifteen consecutive weeks, and diesel stocks sit near critical levels before the summer driving season.

Related Articles:

  • The New Joule Order — Ample physical capacity keeps inflation low and stable and allows lower interest rates, but when demand catches up to capacity constraints, better returns in the physical economy pull capital back to fund expansion, making a commodity super-cycle a capital-expenditure cycle. In real terms, total energy investment is below its level 15 years ago.
  • Power Politics: Energy Self-Sufficiency in a Modern Mercantilist World — China leads in adding power to the grid, with more than 30,000 miles of ultra-high-voltage transmission lines versus zero in the US and lead times for large transformers of 48 weeks against a US average of 143 weeks. This positions China to accommodate new demand sources such as artificial intelligence.
  • Fighting Words: The Energy Transition in 2026 — Estimates based on primary energy overstate how much electricity is needed to replace oil in passenger cars, since electric motors convert 80%-90% of electricity into motion versus about 18% for gasoline cars. Measuring useful final energy net of waste heat avoids this "primary energy fallacy": the US consumed 45 exajoules of useful final energy versus 95 exajoules of primary energy.

AI Summary. No Gulf producer's oil output has fallen to zero, as engineers have rotated well shutdowns, choked flows to a trickle, and used pipelines bypassing the Strait of Hormuz to avoid clogging and pressure loss on restart. The author argues that reopening the strait will surprise observers with its speed.

Javier Blas Bloomberg
Date Posted:

Blas argues tanker traffic will likely return to pre-war levels within 30 days of Hormuz opening. He forecasts 50% of the region’s total production capacity will return within a matter of days and 75% within a few weeks.

How quickly can Gulf oil output rebound once shipping resumes?

Core argument: No oil producer in the region has cut output to zero, because domestic demand must be met and Saudi Arabia and the UAE use pipelines that bypass the Strait of Hormuz.

Nowhere in the region has output fallen to zero, because of the need to meet domestic oil demand and, in the cases of Saudi Arabia and the UAE, the use of pipelines bypassing Hormuz. Thus, petroleum engineers have kept some output running continuously, purposely selecting the wells most likely to have problems when reopening if they’d been out of service. In other cases, they’ve rotated the shutdowns, keeping some wells closed for a couple of weeks, then reopening them while shutting down others in an effort to never have an individual well out of business for more than a few weeks. They have choked down flows to reduce output to a trickle, but still keeping a few barrels coming out. By doing so, they try to avoid problems down the road, like clogging or loss of pressure. Oil engineers are, above all, expert problem solvers. So while the restart process won’t be easy once traversing the strait is possible again, don’t mistake difficult for impossible. The reopening of Hormuz, when politics allows it, will surprise with its speed.

Takeaways by Macro Roundup® AI

  1. No oil producer in the region has cut output to zero, because domestic demand must be met and Saudi Arabia and the UAE use pipelines that bypass the Strait of Hormuz.
  2. Petroleum engineers have kept selected wells producing continuously, rotated shutdowns so no well stays closed more than a few weeks, and choked flows to a trickle to avoid later clogging and loss of pressure.
  3. The restart of oil flows through the Strait of Hormuz will be difficult but not impossible, and the reopening, once politics allows it, will surprise with its speed.

Related Articles:

  • How Long Can the US Be the Oil Supplier of Last Resort? — US net exports of crude and refined products have reached a record average of 5.9m barrels a day, up from 3.3m a year earlier, versus net imports above 5m a decade ago. Strategic Petroleum Reserve releases hit a record weekly pace above 1.2m barrels a day, which would leave the reserve at 242m barrels.
  • China’s Invisible Hand Is Rebalancing the Oil Market — Chinese state-owned oil companies have been reselling cargoes to European and Asian buyers, a sign of surplus that has capped benchmark crude prices and collapsed the premiums paid for physical barrels from about $30 above benchmarks to as little as $1. Satellite data show Chinese commercial stockpiles still rising.
  • How Fast Can Gulf Production Recover After Reopening? — Gulf oil production is likely to mostly recover within a few months of a full and safe reopening of the Strait, given limited reported physical damage to oil fields and the likelihood that Saudi Arabia and the United Arab Emirates deploy spare capacity. Full recovery could take several quarters.

Wednesday, June 10, 2026

AI Summary. Using AT&T's exclusive iPhone carrier period as a natural experiment, the authors estimate that smartphone diffusion reduced fertility by 8.0% among women aged 15–19 and 6.6% among those aged 20–24, with smaller but statistically significant effects at older ages. Survey data show younger cohorts socializing, dating, and drinking less.

Caitlin Myers and Ezekiel Hooper National Bureau of Economic Research
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Using spatial variation in AT&T 3G coverage, an event study of the 2007 introduction of the iPhone finds that iPhone use reduced fertility, particularly among women <24, likely because it was associated with reduced in-person interactions.

Did smartphone adoption lower fertility rates, especially among young women?

Core argument: A synthetic difference-in-differences event study estimates that iPhone carrier coverage reduced fertility by 8.0% at ages 15–19 and 6.6% at ages 20–24 (p < 0.01), with smaller but still statistically significant effects for older cohorts.

The general fertility rate (GFR) — annual live births per 1,000 women aged 15–44 — remained roughly constant at 65 to 70 from 1980 through 2007, then began a sharp decline that has continued for nearly two decades. The iPhone, which was launched in June 2007, diffused rapidly across every demographic group and is consequential for how young adults spend their time. The cohorts whose adolescence overlapped with smartphone diffusion spend sharply less time on face-to-face socialising, dating, paid work, drinking, and driving, and report fewer sexual partners and rising sexual inactivity in young adulthood. Figure 4 reports the results of an SDID (synthetic differences in differences) event study by five-year age band. At ages 15–19, the average ATT coverage effect on fertility is −8.0%, and at ages 20–24, the ATT is −6.6% (p < 0.01). It is much smaller, but still statistically significant for the older cohorts. Figure 6 uses the results of these analyses to produce adjusted predictions of the log fertility rate in an alternate world in which the iPhone was not introduced in 2007. Figure 9 shows in-person social interaction and psychological well-being, for the isolation channel; Figure 10 shows pornography access. These are descriptive trends in nationally representative survey data, consistent with the channels we propose but not a test of any of them.

Takeaways by Macro Roundup® AI

  1. A synthetic difference-in-differences event study estimates that iPhone carrier coverage reduced fertility by 8.0% at ages 15–19 and 6.6% at ages 20–24 (p < 0.01), with smaller but still statistically significant effects for older cohorts.
  2. The general fertility rate held roughly constant at 65 to 70 live births per 1,000 women aged 15–44 from 1980 through 2007, then began a sharp decline that has continued for nearly two decades.
  3. Cohorts whose adolescence overlapped with smartphone diffusion spend sharply less time on face-to-face socialising, dating, paid work, drinking, and driving, and report fewer sexual partners and rising sexual inactivity in young adulthood.

Related Articles:

  • The Collapse of Teen Fertility in the Digital Era — Teen fertility fell in countries with very different healthcare systems, welfare regimes, abortion laws, and religious traditions within roughly the same window, pointing to a global cause. Between 2007 and 2024 the US birth rate fell 71% among women 15–19 and 43% among those 20–24, while rising 9% among those 35–39.
  • US College Students’ Well-Being — A study of US college students finds moderate-to-severe depression reported by 26% of students at one elite institution, 22% reporting moderate-to-severe anxiety and 10% contemplating suicide. Poorer mental health is associated with being female, little exercise, low grades, and financial aid; financial stress is associated with higher suicidal thoughts.
  • The Happiness Crash of 2020 — Survey data show that after 2020 self-reported happiness fell across groups, compressing pre-existing differences — the black-white gap narrowed from 14 points to 6 — while the marital happiness premium of more than 30 points survived intact. Confidence in major public and private institutions declined nearly across the board, with double-digit drops common and losses spanning all parties and ideologies.

AI Summary. Goldman Sachs estimates that net supply of US equity — new shares issued less shares removed by buybacks and take-privates — will be roughly flat in 2026 after being negative since 2003, with a larger influx expected in 2027 as lock-up periods on this year's initial public offerings expire.

Kate Duguid and Emily Herbert The Financial Times
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Goldman Sachs estimates net US equity issuance in 2026 will be ~ flat for the first time since 2003, driven by the decline in buybacks and an increase in equity issuance.

Is the shrinking supply of US stocks coming to an end?

Core argument: Goldman Sachs estimates net US equity supply — new shares less buybacks and take-privates — will be almost flat in 2026, after being negative since 2003, with an even greater influx expected in 2027 as this year's IPO lock-ups expire.

Goldman Sachs estimates net supply of equity in the US — measured by new shares hitting the market less equity removed by buybacks or companies going private — will be almost flat in 2026, having been in negative territory since 2003. The bank expects an even greater influx of new shares in 2027, as lock-up periods on this year’s IPOs expire. Sixty US companies have gone public this year, raising nearly $40bn, the highest year-to-date deal value since 2021, according to data from Dealogic that excludes listings of blank-cheque companies. Goldman expects that figure to rise to a record $225bn this year following the raft of big listings. SpaceX is aiming to raise as much as $86bn in its IPO later this week. Share sales by companies already on public markets could represent a bigger shift. Alphabet last week raised nearly $85bn in a historic equity raise to fund its vast AI investment, a sale expected to turn the Google owner into a net issuer of stock for the first time in 11 years, according to George Pearkes, an analyst at Bespoke Investment Group.

Takeaways by Macro Roundup® AI

  1. Goldman Sachs estimates net US equity supply — new shares less buybacks and take-privates — will be almost flat in 2026, after being negative since 2003, with an even greater influx expected in 2027 as this year's IPO lock-ups expire.
  2. Sixty US companies have gone public this year raising nearly $40bn, the highest year-to-date deal value since 2021 according to Dealogic data excluding blank-cheque listings, and Goldman expects a record $225bn this year, with SpaceX seeking as much as $86bn.
  3. Alphabet raised nearly $85bn in an equity sale to fund its AI investment, which George Pearkes of Bespoke Investment Group expects to turn the Google owner into a net issuer of stock for the first time in 11 years.

Related Articles:

  • One Hundred Years in the U.S. Stock Markets — Over a century, U.S. publicly traded stocks generated roughly $91tn in shareholder wealth enhancement, with returns strongly positively skewed and dominated by a relatively small number of high-performing firms. Because most possible outcomes fall below the mean in a skewed distribution, the authors argue financial planning should focus on median outcomes or the full distribution.
  • Capital Allocation — Internal financing has been the main source of capital for U.S. corporations, with steady new debt issuance except in recession years, consistent with a stable capital structure. Companies have retired equity on average, and net equity issuance remains negative even after accounting for stock-based compensation.
  • 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. US consumer prices rose 0.5% on the month and 4.2% from a year earlier, according to Bureau of Labor Statistics data, with more than half the monthly advance coming from higher energy costs, while the measure excluding food and energy rose 0.2%. Inflation-adjusted average hourly earnings fell 0.7% from a year earlier.

Augusta Saraiva Bloomberg
Date Posted:

Driven by energy prices, headline CPI rose to 4.2% y/y in May and core rose to 2.9% y/y. Real wages declined .7% y/y. Noting subdued core, Bloomberg’s economic team suggests this is likely the peak on a year-over-year basis.

Is rising inflation driven by energy costs cutting into real wages?

Core argument: The U.S. consumer price index rose 0.5% from April and 4.2% from a year earlier, the most since early 2023, according to Bureau of Labor Statistics data.

The consumer price index climbed 0.5% from April and 4.2% from a year earlier, the most since early 2023, according to Bureau of Labor Statistics data. An underlying gauge of inflation that excludes food and energy, however, rose a less-than-expected 0.2% from the prior month. More than half of the advance in the overall CPI was due to higher energy costs, though prices in some categories, like transportation services, health insurance, and new vehicles, fell. Real average hourly earnings fell 0.7% from a year earlier, the biggest drop in more than three years.

Takeaways by Macro Roundup® AI

  1. The U.S. consumer price index rose 0.5% from April and 4.2% from a year earlier, the most since early 2023, according to Bureau of Labor Statistics data.
  2. Core CPI, which excludes food and energy, rose a less-than-expected 0.2% from the prior month, while more than half of the overall CPI advance came from higher energy costs and prices fell in transportation services, health insurance, and new vehicles.
  3. Real average hourly earnings fell 0.7% from a year earlier, the biggest drop in more than three years.

Related Articles:

  • Home Alone: Inflation And The New Fed Chair — Current readings on labor market tightness, manufacturing price pressures, supply chain tightness and the output gap resemble conditions that have historically preceded Federal Reserve rate increases rather than cuts, and futures markets are pricing in hikes. Averaging several monetary policy rules implies a policy rate of 4.00%–4.85% versus the current 3.50%–3.75%.
  • Do Voters Punish Inflation or Pay Cuts? Inflation and Real Wages in U.S. Elections — An analysis of U.S. counties estimates that where wages grew faster than prices, voters supported the incumbent party more, while counties with larger real wage losses than average shifted more toward the opposition. A one-standard-deviation larger real wage loss is associated with shifts of roughly 0.10 and 0.19 percentage points in vote share and margin.
  • US Consumer Sentiment Slides to Record Low on Price Concerns — The University of Michigan's consumer sentiment index fell 5 points to 44.8, a record low and weaker than all economist projections in a Bloomberg survey. Consumers expect prices to rise 3.9% annually over the next five to 10 years, up from 3.5%, and 4.8% over the coming year.

AI Summary. Governments are borrowing from syndicated bond markets — where sovereign debt is offered to investors through banks — at a record pace as public spending surges, with $504bn sold year-to-date according to data compiled by Bloomberg. That exceeds the volume issued during the first half of 2020, when nations were funding pandemic economic support.

Hannah Benjamin-Cook and Alice Gledhill Bloomberg
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Governments issued $504B of syndicated debt in H1 2026, even more than during the acute phase of the pandemic in the first half of 2020. Among other benefits, syndication can offer sovereign borrowers some insulation from auction risk.

Are governments issuing sovereign bonds at a record pace as spending rises?

Core argument: Sovereign issuers have sold $504 billion of syndicated bonds so far this year, a record pace, according to data compiled by Bloomberg.

Governments are borrowing from syndicated bond markets at a record clip as public spending surges. Sovereign issuers have sold $504 billion of the debt — which is offered to investors via banks — so far this year, according to data compiled by Bloomberg. That’s more than in the first half of 2020, when nations were paying to support their economies during Covid-19 lockdowns.

Takeaways by Macro Roundup® AI

  1. Sovereign issuers have sold $504 billion of syndicated bonds so far this year, a record pace, according to data compiled by Bloomberg.
  2. Syndicated sovereign bond issuance this year exceeds that of the first half of 2020, when nations were paying to support their economies during Covid-19 lockdowns.
  3. Governments are borrowing from syndicated bond markets, where debt is offered to investors via banks, at a record clip as public spending surges.

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  • Are Government Bonds Safe in Times of War and Pandemic? — Government bonds severely underperform in wartime, in absolute terms and relative to equities, housing, and economic growth, unlike in financial crises when bonds tend to outperform stocks. The U.S. and U.K. reduced war-driven debt-to-GDP ratios without explicit default, using surprise inflation and financial repression that shifted fiscal burdens onto bondholders.
  • Can Treasury Markets Add and Subtract? — The authors estimate that Treasury yields rise on days when official cost estimates reveal deficit-increasing legislation, with a one-time 1 percentage point increase in the deficit-to-GDP ratio raising the 10-year yield by 0.75 basis points, or 6.75 basis points for a persistent deficit shock. The response reflects higher expected inflation and term premia alongside lower convenience yields.

AI Summary. A study tracking software developers before and after adopting AI tools measured output from lines of code to discrete files edited to new software releases, and found little evidence that AI-assisted production gains translated into higher consumption. The increase in mobile app releases came without any increase in downloads, with most new apps failing to attract even a modest audience.

John Burn-Murdoch The Financial Times
Date Posted:

Citing Demirer’s data, Burn-Murdoch notes the release of AI coding tools drove a significant increase in app releases, which, “has not been accompanied by any increase in downloads — most of the new apps fail to capture even a modest audience.”

Do AI-driven gains in software production translate into higher consumption?

Core argument: Mert Demirer and co-authors tracked software developers before and after they adopted AI tools, measuring output at several levels: amount of code written, discrete files edited, projects or features worked on, and actual releases of new software.

Mert Demirer and co-authors tracked software developers’ work before and after they adopted AI tools. Importantly, they measured this at several different levels, from the amount of code written to the number of discrete files edited, to the number of projects or features worked on, to actual releases of new software. When the researchers looked at whether AI-assisted increases in software production have led to increased consumption, they found little evidence. The marked increase in mobile app releases over the past year has not been accompanied by any increase in downloads — most of the new apps fail to capture even a modest audience.

Takeaways by Macro Roundup® AI

  1. Mert Demirer and co-authors tracked software developers before and after they adopted AI tools, measuring output at several levels: amount of code written, discrete files edited, projects or features worked on, and actual releases of new software.
  2. Demirer and co-authors found little evidence that AI-assisted increases in software production have translated into increased consumption.
  3. A marked increase in mobile app releases has not been accompanied by any increase in downloads, as most of the new apps fail to capture even a modest audience.

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  • Writing Code vs. Shipping Code: Productivity Effects Across Generations of AI Coding Tools — The authors estimate that AI coding tools raise developers' task-level productivity by about 40% with autocomplete, 140% including synchronous agents, and 180% with asynchronous agents, with larger effects for less active developers. Gains attenuate up the production chain: synchronous agents raise lines of code 741% and pull requests 65% but releases only 20%.
  • Commoditization, Orchestration, and the New AI Stack — The author argues that as incremental gains from larger AI training runs shrink, the return on additional computing power falls, weakening the case for the training spending that dominates data center demand. Survivors of model commoditization will be those owning the orchestration layer or the applications where outcomes are priced.
  • Chart of the Day: Small Models are Closing the Gap to Frontier AI — Achieving 60% on MMLU, a test of academic reasoning, once required a 540bn-parameter model but was reached by a 3.8bn-parameter model two years later, a 142x reduction in parameters. Models small enough to run on phones or sensors shift inference from data centers to devices, weakening the case for paying cloud providers per token.