Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Friday, July 17, 2026

AI Summary. US equities have underperformed other major regions, with Europe outperforming the US by 12%, Japan by 17% and emerging markets by 27%, while US Treasuries have lagged most other developed-market and emerging-market bond markets except Japan. The author argues US long-bond yields appear poised to break higher, as even a softer-than-expected inflation reading failed to spark a bond rally.

Louis-Vincent Gave Gavekal
Date Posted:

Louis-Vincent Gave questions American equities’ outperformance going forward, noting that since January 2025, Europe and Japan have outperformed the US by 12% and 17%, respectively, as measured by MSCI total returns in dollars.

Are US stocks and bonds underperforming other major markets?

Core argument: Since Trump's inauguration, US equities have lagged other major regions, with Europe outperforming the US by 12%, Japan by 17%, and emerging markets by 27%.

Since Trump was sworn in, US equity markets have actually not outperformed the other major regions. Quite the contrary: Europe has outperformed the US by 12%, Japan has outperformed by 17%, and emerging markets by 27%. Since Trump was sworn in, US treasuries have underperformed most major emerging market bond markets and almost all other OECD bond markets, with one notable exception: Japan. Japan’s bond markets have been in full meltdown for the past two years. Staying on US treasuries, the yields on US long bonds look like they really want to break out on the upside. Even a recent downside surprise on US inflation did not prove enough to trigger a rally in US bonds.

Takeaways by Macro Roundup® AI

  1. Since Trump's inauguration, US equities have lagged other major regions, with Europe outperforming the US by 12%, Japan by 17%, and emerging markets by 27%.
  2. US Treasuries have underperformed most major emerging market bond markets and almost all other OECD bond markets since Trump took office, the exception being Japan, whose bond markets have been in full meltdown for two years.
  3. Yields on US long bonds appear to be pushing toward an upside breakout, and a downside surprise on US inflation did not trigger a rally in US bonds.

Related Articles:

  • The Dollar’s Hidden Dependence on the AI Trade — Net foreign inflows into US equities have reached a record high, driven in large part by overseas investors seeking artificial intelligence exposure unavailable in their home markets. Because most foreign equity investors leave currency risk unhedged, a pullback in these inflows if AI disappoints poses a significant downside risk to the US dollar.
  • Semiquincententacles — Leading artificial-intelligence labs are moving to usage-based token pricing on a cost-plus basis that includes total ownership costs, pushing token prices higher and giving some enterprises reason to migrate to cheaper open models. Frontier models remain necessary for cybersecurity, distillation training, agents, and scientific discovery, where maximum performance is required.
  • The Debasement Trade Is Unraveling and Kevin Warsh Is One Big Reason — The "debasement trade" — favoring gold and Bitcoin over a dollar seen as vulnerable to inflationary, fiscal and monetary excess — has been a defining market narrative, but a new Federal Reserve chairman's emphasis on price stability as the overriding priority lifted the dollar and long-dated Treasuries at the expense of gold and crypto.

AI Summary. The gap between 30-year and 10-year US Treasury yields has widened to 0.5 percentage points from 0.2, which suggests investors are more wary of future deficits, inflation, or random shocks. Dealers now buy only 10–15% of Treasurys at auction, down from 40–50% previously, according to JPMorgan Chase data.

Greg Ip Wall Street Journal
Date Posted:

A JPM analysis finds the dealers’ share of Treasury auctions has declined from between ~43% and ~51% across maturities in 2010 to between ~11% and ~15% today. Greg Ip cautions “Maybe end-users just love Treasurys; or maybe dealers are reluctant to risk their own capital.”

Are rising long-term bond yields signaling investor wariness about deficits?

Core argument: The 30-year Treasury yields 0.5 percentage points more than the 10-year, up from 0.2 in early 2025, a relatively steeper rise suggesting investors are more wary of future deficits, inflation, or random shocks.

The 30-year Treasury yields 0.5 percentage points more than the 10-year, up from 0.2 in early 2025. Treasury prices, which move in the opposite direction to yields, get more sensitive to risks as maturity lengthens. Thus, the relatively steeper rise in 30-year yields means investors are more wary of future deficits, inflation, or random shocks. The International Monetary Fund has found that on auction days, the 30-year yield has moved much more since 2022 than in the prior eight years. It notes government-bond yields globally have risen relative to swap rates, a benchmark borrowing rate, which may mean dealers want more compensation for carrying Treasurys in their inventory. In 2010, dealers routinely bought 40% to 50% of Treasurys at auction (end-users such as foreign central banks and pension funds bought the rest). This year, they only bought 10% to 15%, according to JPMorgan Chase data.

Takeaways by Macro Roundup® AI

  1. The 30-year Treasury yields 0.5 percentage points more than the 10-year, up from 0.2 in early 2025, a relatively steeper rise suggesting investors are more wary of future deficits, inflation, or random shocks.
  2. The International Monetary Fund has found the 30-year Treasury yield has moved much more on auction days since 2022 than in the prior eight years, and that government-bond yields globally have risen relative to swap rates.
  3. Dealers bought only 10% to 15% of Treasurys at auction this year, down from 40% to 50% routinely in 2010, when end-users such as foreign central banks and pension funds bought the rest, according to JPMorgan Chase data.

Related Articles:

  • How Might Fiscal Policy Respond to the Rise of Artificial Intelligence? — The Congressional Budget Office estimates that a permanent 0.5 percentage point increase in annual productivity growth would lower publicly held federal debt after 30 years by 39% of GDP, offsetting roughly half the projected rise from 101% of GDP to 175%. Higher revenue and slower spending growth outweigh higher interest costs.
  • The Budget and Economic Outlook: 2026 to 2036 — The Congressional Budget Office projects the federal deficit will grow from $1.9tn (5.8% of GDP) to $3.1tn (6.7%) over a decade, above the 3.8% averaged over the past 50 years, with rising net interest costs driving much of the increase. Federal debt held by the public is projected to rise from 101% to 120% of GDP.
  • Inflation and Debt — Congressional Budget Office long-term projections show sustained primary deficits of 2% of GDP driving the debt-to-GDP ratio steadily higher, a path the agency itself labels unsustainable. Closing a 2% of GDP fiscal gap is economically straightforward for a growing country at peace, but inflation or default would not resolve the problem, since prospective deficits still require continued borrowing.

AI Summary. Chinese startup Moonshot priced its latest AI model at roughly the same level as Anthropic's Sonnet, a premium over other Chinese models, and said it has 2.8tn parameters and a 1m token context window. Artificial Analysis ranked the model ahead of Anthropic's Opus 4.8 on some frontier benchmarks, the first Chinese open-weight model to do so.

Jeanny Yu and Sunny Bangia Bloomberg
Date Posted:

A Chinese startup’s new open-weight Kimi K3 model has performance on par with leading American frontier models. Only Anthropic’s Claude Fable 5 and OpenAI’s GPT-5.6 outperform Kimi K3 overall.

Are Chinese AI models competing on capability rather than price?

Core argument: Moonshot's Kimi K3 has 2.8 trillion parameters and a 1 million token context window, and Artificial Analysis ranked it ahead of Anthropic's Opus 4.8 on some frontier benchmarks, the first Chinese open-weight model to do so.

Moonshot’s release shows that China’s AI race is evolving beyond a competition on cost alone. The startup priced its latest model at roughly the same amount as Anthropic Sonnet, a premium compared to other Chinese models based on its strong capabilities. Moonshot also claimed it surpassed Z.AI’s most advanced offering on coding tasks. That’s stoking concerns that competition in China’s AI sector is intensifying even as the country’s sector leaders race onto global markets. Moonshot said its latest model has 2.8 trillion parameters and a 1 million token context window, gauges of its capability. Artificial Analysis ranked Kimi K3 ahead of Anthropic’s Opus 4.8 on some frontier benchmarks, making it the first Chinese open-weight model to achieve that milestone.

Takeaways by Macro Roundup® AI

  1. Moonshot's Kimi K3 has 2.8 trillion parameters and a 1 million token context window, and Artificial Analysis ranked it ahead of Anthropic's Opus 4.8 on some frontier benchmarks, the first Chinese open-weight model to do so.
  2. Moonshot priced its latest model at roughly the same level as Anthropic's Sonnet, a premium over other Chinese models based on its strong capabilities, indicating China's AI race is evolving beyond competition on cost alone.
  3. Moonshot claimed its latest model surpassed Z.AI's most advanced offering on coding tasks, stoking concerns that competition within China's AI sector is intensifying as the country's sector leaders race onto global markets.

Related Articles:

  • Semiquincententacles — Leading artificial-intelligence labs are moving to usage-based token pricing on a cost-plus basis that includes total ownership costs, pushing token prices higher and giving some enterprises reason to migrate to cheaper open models. Frontier models remain necessary for cybersecurity, distillation training, agents, and scientific discovery, where maximum performance is required.
  • Why .400 Hitters Disappeared — and What It Means for AI — Artificial intelligence models' capability gains are shrinking in percentage terms, falling from about 15% relative to the baseline early on to roughly 10% for the same absolute increment, narrowing the gap between frontier and good-enough models. The author argues this points to a commoditizing market where price, not minor model differences, becomes the main differentiator, pressuring frontier firms' margins.
  • Cover Ratios for Hyperscaler Bonds Declining — Investor demand for hyperscaler bond deals has weakened, with the cover ratio — dollars of investor orders per dollar of bonds issued — falling from nearly 5x to below 2x. This suggests investors may require wider spreads to absorb additional hyperscaler bond supply.

AI Summary. Alphabet, Meta, Amazon, and Oracle have issued more than $300bn of debt since the start of 2025, including roughly $80bn in British pounds, euros, and Japanese yen, quickly making them among the largest names in those bond indexes. About 79% of those bonds now trade at wider spreads than on their first day.

Tasos Vossos and Ronan Martin Bloomberg
Date Posted:

~79% of hyperscaler bonds issued since early 2025 “are currently indicated at a wider spread compared to their first trading day.” On average, the hyperscalers’ debt is down 1.4% on a total return basis.

How is heavy tech borrowing affecting global bond index performance?

Core argument: Alphabet, Meta, Amazon, and Oracle have issued more than $300 billion of debt since the start of 2025, including close to $80 billion in currencies such as the British pound, the euro, and the Japanese yen, according to data compiled by Bloomberg.

Alphabet, Meta, Amazon, and Oracle have issued more than $300 billion since the start of 2025, according to data compiled by Bloomberg. Close to $80 billion of the debt was issued in currencies including the British pound, the euro, and the Japanese yen — and the borrowers became some of the biggest names in those indexes practically overnight. About 79% of the sector’s bonds sold since early 2025 are currently indicated at a wider spread compared to their first trading day, according to data compiled by Bloomberg. They have fallen 3.3 points from their issue price on average and are 1.4% down on a total return basis. The bonds are currently among the worst performers in every market in which they were issued.

Takeaways by Macro Roundup® AI

  1. Alphabet, Meta, Amazon, and Oracle have issued more than $300 billion of debt since the start of 2025, including close to $80 billion in currencies such as the British pound, the euro, and the Japanese yen, according to data compiled by Bloomberg.
  2. About 79% of the sector's bonds sold since early 2025 are indicated at wider spreads than on their first trading day, falling 3.3 points from issue price on average and 1.4% on a total return basis, according to data compiled by Bloomberg.
  3. The hyperscalers' bonds rank among the worst performers in every market in which they were issued, and the borrowers became some of the biggest names in those indexes practically overnight.

Related Articles:

  • Cover Ratios for Hyperscaler Bonds Declining — Investor demand for hyperscaler bond deals has weakened, with the cover ratio — dollars of investor orders per dollar of bonds issued — falling from nearly 5x to below 2x. This suggests investors may require wider spreads to absorb additional hyperscaler bond supply.
  • Bond Traders Stunned as Losses on SpaceX’s New Debt Keep Growing — SpaceX's $25bn bond offering has weakened in secondary trading, with paper losses relative to Treasuries totaling roughly $305m. Traders attribute the selling to fast-money accounts seeking quick profits rather than buy-and-hold investors, though the company also won investment-grade ratings despite expectations of years of negative cash flow.
  • AI Set to be Largest CapEx Cycle Ever … and Soon Majority Externally Financed — Hyperscaler and data-center investment is tracking toward $1.5tn annually by 2030, which in real terms would exceed the 2005-06 housing boom, the 1990s fiber peak, and the 1882 railroad peak combined. External debt and equity are projected to fund close to 90% of the buildout, making it dependent on credit markets.

AI Summary. Unemployment has stayed at or below the Federal Reserve's estimated non-accelerating inflation rate of unemployment of under 4.5% for 57 months, tied for the longest such streak on record. The author argues this persistent labor market tightness is a key reason inflation has remained elevated and that keeping interest rates higher for longer is needed to reach the 2% target.

Torsten Sløk Apollo
Date Posted:
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US unemployment has been under the Fed’s 4.5% estimate of the non-accelerating inflation rate of unemployment (NAIRU) for 57 months. Sløk argues “persistent tightness is a key reason inflation has remained elevated.”

Does a persistently tight labor market keep inflation above target?

Core argument: U.S. unemployment has stayed at or below the Fed's estimated NAIRU of under 4.5% for 57 months, tied for the longest such streak on record, leaving the labor market in excess-demand territory for an unusually long time.

With the Fed estimating the non-accelerating inflation rate of unemployment (NAIRU) at below 4.5%, and unemployment having stayed at or below that level for 57 months, tied for the longest such streak on record, the labor market has been operating in excess-demand territory for an unusually long time. That persistent tightness is a key reason inflation has remained elevated: when unemployment runs below NAIRU, wages and prices face sustained upward pressure. Prior episodes of sub-4.5% unemployment were typically far shorter. The current one is one of the longest on record, which helps explain why the ongoing inflation overshoot since 2021 has been so stubborn. The bottom line is that a strong economy is the reason why inflation has been high, and only by keeping rates higher for longer can the Fed cool inflation down towards the FOMC’s 2% inflation target.

Takeaways by Macro Roundup® AI

  1. U.S. unemployment has stayed at or below the Fed's estimated NAIRU of under 4.5% for 57 months, tied for the longest such streak on record, leaving the labor market in excess-demand territory for an unusually long time.
  2. When unemployment runs below NAIRU, wages and prices face sustained upward pressure, which the author identifies as a key reason inflation has remained elevated since the overshoot began in 2021.
  3. Prior episodes of sub-4.5% unemployment were typically far shorter, and the author argues that only by keeping rates higher for longer can the Fed cool inflation toward the FOMC's 2% target.

Related Articles:

  • The U.S. Job Market is (Still) Inflationary — Prices for locally produced U.S. services are rising about 1–1.5 percentage points faster than in the years just before the pandemic, leaving underlying inflation as far from the Federal Reserve's goals as it was three years ago. Prices for manufacturing components and data-center-related loaded circuit boards have also risen.
  • Labor Force Participation Is High If You Measure It Right — The headline labor force participation rate — the share of people 16 and older working or looking for work — is a limited gauge of labor market health because participation varies greatly by age. Aging baby boomers and the addition of nearly 1.7m Americans 65 and older to population estimates add distortion.
  • Baby Busts and Growth Booms: Demographic Change and the Macroeconomy — A 1pp lower birth rate 20 years earlier is associated with 22 log points higher output per worker 20 years later and 29 log points higher after 40 years, about 0.73pp faster annual growth. The authors find lower birth rates are also associated with more labor-saving patents, larger high-tech shares, and higher productivity growth.

Monday, July 20, 2026

AI Summary. Demand for frontier artificial intelligence models exceeds supply because computing capacity is scarce, allowing chip suppliers and their customers to resell compute at high margins. The author argues alarm over Chinese models is overblown, expecting the inference market to grow faster than training costs so labs can thrive at lower prices.

Ben Thompson Stratechery
Date Posted:

US AI labs look pricier than Chinese rivals right now — but that’s due to a transitory compute shortage, not a gap in the underlying cost structure. Once US compute scales up, the apparent gap will disappear.

Can AI labs thrive at lower prices as inference demand grows?

Core argument: Demand for frontier AI models exceeds supply because compute is scarce, allowing Nvidia to earn very large margins while its customers, such as SpaceXAI, resell compute at high margins to buyers like Anthropic.

Right now demand exceeds supply for frontier models, and supply is limited by a lack of compute. This computer shortage doesn't just mean that a compute supplier like Nvidia makes very large margins, but also that Nvidia's customers, like SpaceXAI, can turn around and resell compute at high margins as well to a company like Anthropic. Anthropic, meanwhile, can pay the markup because they can sell tokens with a higher markup still. I think the reaction to Kimi and Chinese models generally is pretty over-blown, at least from an economic perspective. As long as training consumed more GPUs than inference, it was critical to maximize inference revenue to help fund the next training run, which meant charging very high prices for inference. Going forward, however, I expect the inference market to grow much faster than training costs, which means they really can make it up in volume... frontier labs should have more confidence that they can not just survive but thrive with lower prices (once they have sufficient compute).

Takeaways by Macro Roundup® AI

  1. Demand for frontier AI models exceeds supply because compute is scarce, allowing Nvidia to earn very large margins while its customers, such as SpaceXAI, resell compute at high margins to buyers like Anthropic.
  2. Anthropic can absorb compute markups because it sells tokens at a still higher markup.
  3. The reaction to Kimi and Chinese models is overblown from an economic perspective, since the inference market is expected to grow much faster than training costs, letting frontier labs thrive at lower prices once they have sufficient compute.

Related Articles:

  • China’s Moonshot Unveils AI Model That Narrows Gap With US Firms — Chinese startup Moonshot priced its latest AI model at roughly the same level as Anthropic's Sonnet, a premium over other Chinese models, and said it has 2.8tn parameters and a 1m token context window. Artificial Analysis ranked the model ahead of Anthropic's Opus 4.8 on some frontier benchmarks, the first Chinese open-weight model to do so.
  • Semiquincententacles — Leading artificial-intelligence labs are moving to usage-based token pricing on a cost-plus basis that includes total ownership costs, pushing token prices higher and giving some enterprises reason to migrate to cheaper open models. Frontier models remain necessary for cybersecurity, distillation training, agents, and scientific discovery, where maximum performance is required.
  • Why .400 Hitters Disappeared — and What It Means for AI — Artificial intelligence models' capability gains are shrinking in percentage terms, falling from about 15% relative to the baseline early on to roughly 10% for the same absolute increment, narrowing the gap between frontier and good-enough models. The author argues this points to a commoditizing market where price, not minor model differences, becomes the main differentiator, pressuring frontier firms' margins.

AI Summary. Using 5.1m product listings from Sears catalogs, the authors construct a quality-adjusted price index implying much lower goods inflation for 1900–1990 than standard deflators, with real goods consumption growing 39x rather than 10.3x. They estimate faster growth before World War II (5.4% a year, 1900–1939) than after (4.2%, 1946–1980).

Verónica Bäcker-Peral and Benjamin Wittenbrink Massachusetts Institute of Technology
Date Posted:
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Using 5.1mm Sears catalog listings and LLM-based hedonic estimation, this study finds real goods consumption grew 39-fold from 1900 to 1990, not 10.3-fold as official data imply, with the largest mismeasurement concentrated before WWII.

Does quality-adjusted pricing show faster goods consumption growth before the war?

Core argument: Using a quality-adjusted price index built from 5.1 million Sears catalog listings, the authors estimate real goods consumption grew by a factor of 39 between 1900 and 1990, compared with a factor of 10.3 using standard goods deflators.

Measuring real GDP growth requires distinguishing changes in prices from changes in product quality... systematic quality adjustment. price indexes are unavailable for much of the twentieth century. We construct a new quality-adjusted price index using 5.1 million product listings from Sears catalogs, 1900–1990. The resulting cost-of-living index implies substantially lower goods inflation than conventional deflators between 1900 and 1990, real goods consumption grew by a factor of 39 using our index,compared with a factor of 10.3 using standard goods deflators. Figure 5 shows our estimates of the cost-of-living index for consumer goods in the solid red line. The dashed black line shows average cumulated price changes for the same sample of consumer goods. The gap.is largest before World War II, reversing the conventional view that goods consumption growth was slower before 1945 than in the post-war decades.As Gordon puts it, 'the history of price changes from 1914 to 1947 [is] the black hole where little is known.' This paper sheds light on that black hole. We estimate average annual real goods consumption growth of 5.4% for 1900-1939 and 4.2% for 1946-1980... the era of fastest growth was in the prewar, not postwar, contrary to conventional estimates.

Takeaways by Macro Roundup® AI

  1. Using a quality-adjusted price index built from 5.1 million Sears catalog listings, the authors estimate real goods consumption grew by a factor of 39 between 1900 and 1990, compared with a factor of 10.3 using standard goods deflators.
  2. The authors estimate average annual real goods consumption growth of 5.4% for 1900–1939 and 4.2% for 1946–1980, implying the fastest growth came in the prewar rather than postwar era, contrary to conventional estimates.
  3. The new cost-of-living index implies substantially lower goods inflation than conventional deflators, with the gap largest before World War II, a period Gordon describes as "the black hole where little is known.".

Related Articles:

  • European vs. U.S. Economic Performance: An Update — Productivity growth from 2000-2019 was higher in the US than in western Europe, but almost half the gap disappears when information and communications technology is excluded, even though tech was 9.2% of US output versus 5.4% in the EU. The author estimates this difference in industrial mix accounts for roughly 40% of the overall productivity growth gap.
  • Is The Great Stagnation Actually Just a ‘So-So’ Stagnation? — Long-running U.S. tests show population average reading scores moved from 255 to 256 out of 500 and math from 266 to 271, despite educational attainment rising more than three years. The author argues that if added schooling has not raised productivity, measured total factor productivity growth has been understated, shrinking the apparent "Great Stagnation" by about a third.

AI Summary. The "excess CAPE yield" — the gap between cyclically adjusted earnings yields on stocks and inflation-adjusted Treasury bond yields — stands at 1.4%, far below its long-run average of 4.7%. Historically, a low excess yield has been associated with poor subsequent 10-year excess returns on stocks, though it does not reliably predict an imminent crash.

Martin Wolf Financial Times
Date Posted:

US equities account for 55% of the value of global stock markets. Shiller’s excess Cape yield implies US stocks will return 1.4% over the next 10 years, well under their long-term mean of 4.7%.

Does a low excess earnings yield signal poor stock returns ahead?

Core argument: Shiller's excess CAPE yield stood at 1.4% in July 2026, far below its long-run average of 4.7%, a level indicating stocks are expensive relative to inflation-adjusted Treasury yields.

[Shiller's] "excess Cape yield” measures the difference between the inverted Cape ratio — or cyclically adjusted aggregate earnings per share — and inflation-adjusted yields on Treasury bonds. When stocks are expensive, the excess yield is low. When stocks are cheap, the excess yield is high. Crucially, when the excess yield is low, the subsequent 10-year excess returns on stocks have normally been poor. The excess yield is a mere 1.4% in July 2026, far below its long-run average of 4.7%. With stocks this expensive, the chances of healthy future returns must, again, be relatively low. Cape is far from a perfect predictor of an imminent crash: if it were, it would not be; well-informed investors would then not allow markets to reach extreme positions in the first place, and so crashes would be far less likely.

Takeaways by Macro Roundup® AI

  1. Shiller's excess CAPE yield stood at 1.4% in July 2026, far below its long-run average of 4.7%, a level indicating stocks are expensive relative to inflation-adjusted Treasury yields.
  2. The excess CAPE yield measures the gap between the inverted CAPE ratio and inflation-adjusted Treasury bond yields, and when it has been low, subsequent 10-year excess returns on stocks have normally been poor.
  3. CAPE is far from a perfect predictor of an imminent crash, since well-informed investors would otherwise not allow markets to reach extreme positions and crashes would be far less likely.

Related Articles:

  • US Stock Market To Stop Shrinking For First Time In 23 Years — 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.
  • Opportunities and Expectations: The Present Value of Growth Opportunities in Valuation — A stock's value can be split into steady-state value from current operations and the "present value of growth opportunities" from future value-creating investments, which has averaged 35% of the S&P 500's price historically. Lower shares of price attributed to growth opportunities have been associated with higher subsequent returns, most clearly at the extremes.
  • 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.

AI Summary. The Bureau of Economic Analysis estimates total housing costs in the Miami–Fort Lauderdale–Palm Beach area are about 5% higher than in the New York metropolitan area, with southern Connecticut also cheaper than Miami. Miami's typical household income is about $1,000 below the national median, and average lawyer pay trails New York's by roughly $51,000.

Ben Steverman and Paulina Cachero Bloomberg
Date Posted:

South Florida’s consumer price index is up 36% relative to 2019, leaving Miami’s cost of living above that of New York. Wages have not kept pace; Miami metro area’s typical household income is ~ $1,000 less than the national median.

Is Miami still cheaper to live in than New York?

Core argument: Total housing costs in the Miami–Fort Lauderdale–Palm Beach metro area run about 5% higher than in New York and its suburbs, including New Jersey, according to the Bureau of Economic Analysis.

The total cost of housing in the Miami, Fort Lauderdale and Palm Beach metropolitan area is about 5% higher than in New York and its suburbs, which includes New Jersey, according to the Bureau of Economic Analysis. Southern Connecticut, where many hedge funds are located, is also now cheaper than Miami. Salaries largely aren’t keeping pace with costs. The Miami metro area’s typical household income is about $1,000 less than the national median, according to the latest US Census Bureau estimates. Even professionals make less in Miami than they do in New York City. The average lawyer in the New York City area earned about $51,000 more last year than one in Miami, BLS data show.

Takeaways by Macro Roundup® AI

  1. Total housing costs in the Miami–Fort Lauderdale–Palm Beach metro area run about 5% higher than in New York and its suburbs, including New Jersey, according to the Bureau of Economic Analysis.
  2. The Miami metro area's typical household income is about $1,000 below the national median, according to US Census Bureau estimates, as salaries largely fail to keep pace with costs.
  3. The average lawyer in the New York City area earned about $51,000 more last year than one in Miami, according to BLS data, and southern Connecticut, where many hedge funds are located, is now cheaper than Miami.

Related Articles:

  • Miami Got NYC’s Billionaires. Will It Get Their Businesses? — Miami has added investment banking and portfolio management jobs but has grown less than New York City, trailing Salt Lake City in banking growth and Atlanta in portfolio management growth. Measured by employment levels in both segments combined, South Florida ranks fifth among counties, behind Manhattan, Boston, Chicago, and Los Angeles.
  • Florida’s Population Boom Fizzles as High Costs Drive Away Middle Class — Florida's net domestic migration has slowed to a trickle as prime-working-age residents leave citing affordability and arrivals from other states decline. An influx of wealthy newcomers has helped drive up home prices, inflation in parts of the state outpaced the national average, home-insurance rates soared, and deaths began outnumbering births.
  • Miami Is Getting Much Richer. It’s Also Getting Smaller — People moving to Miami-Dade County from other states had average adjusted gross income of $178,000, more than double that of those leaving for other states, according to an analysis of Internal Revenue Service data. A residence-planning firm counts 38,800 millionaires in Miami, up 94% over a decade.

AI Summary. Lockheed Martin plans to field a lower-cost Patriot missile, the PAC-3 Adapted Capability Effector, priced at less than half the roughly $4mn per-missile cost of its current PAC-3 MSE interceptors, developed and manufactured with US and European industry partners. The company cites soaring military demand for more cost-effective ways to counter drones.

Sylvia Pfeifer Financial Times
Date Posted:

Lockheed Martin is releasing a new version of the Patriot missile that is half the cost of the current system. The system is designed to be co-produced by European partners to create scale.

Can a lower-cost interceptor meet surging demand for drone defense?

Core argument: Lockheed Martin's planned PAC-3 Adapted Capability Effector (ACE) missile would cost less than half the roughly $4mn per-missile price of its current PAC-3 MSE interceptors, according to US Army budget documents.

Lockheed Martin plans to field a new, lower-cost model of the Patriot missile that can be deployed to battlefields at speed, as demand from militaries for more cost-effective ways to counter drones soars as a result of recent conflicts. The new PAC-3 Adapted Capability Effector (ACE) missile would cost less than half its current PAC-3 MSE interceptors that, according to US Army budget documents, cost about $4mn per missile. Lockheed said it planned to develop and manufacture the weapon together with US and European industry partners.

Takeaways by Macro Roundup® AI

  1. Lockheed Martin's planned PAC-3 Adapted Capability Effector (ACE) missile would cost less than half the roughly $4mn per-missile price of its current PAC-3 MSE interceptors, according to US Army budget documents.
  2. Lockheed Martin said it plans to develop and manufacture the lower-cost Patriot missile with US and European industry partners, fielding a model that can be deployed to battlefields at speed.
  3. Military demand for more cost-effective ways to counter drones is soaring as a result of recent conflicts.

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  • US Defence Groups To Meet Donald Trump As Missile Production Struggles — Research from PwC finds the five largest US defence contractors had a combined backlog of undelivered orders of $1.36tn, up 24% from the prior year, as Lockheed Martin, Northrop Grumman, Raytheon and L3Harris invest billions of dollars expanding manufacturing. The US government has signed framework agreements with four companies to produce more than 10,000 low-cost cruise missiles over three years.
  • Trump Invokes Cold War-Era Law to Boost Munitions Production — The U.S. has invoked the Defense Production Act to expand munitions output amid doubts that American weapons makers can meet increased demand. U.S. officials say more than 1,000 long-range Tomahawk missiles and 1,500–2,000 air-defense interceptors have been fired in the war with Iran, and replacing those stockpiles could take up to six years.