The Weekly Briefing from Capital Economics

Can another set of blow-out AI earnings reignite the rally that has powered equities for so long but recently seems to have run out of puff?Chief Markets Economist Jonas Goltermann joins The Weekly Briefing from Capital Economics to discuss the latest tech earnings, whether Scott Bessent has managed to cap Treasury yields and what investors will want to hear from Kevin Warsh in his Jackson Hole address.Also on the show, just days after Bessent announced ‘Economic D-Day’ for Iran, Chief Emerging Markets Economist William Jackson assesses how much pain the Iranian economy is in and whether further pressure from the Trump administration could be enough to force Tehran to capitulate.Related contentConcentrated earnings probably mean concentrated returnshttps://www.capitaleconomics.com/publications/capital-daily/concentrated-earnings-probably-mean-concentrated-returnsCan Iran continue to hold out?https://www.capitaleconomics.com/publications/middle-east-north-africa-economics-update/can-iran-continue-hold-out

This special episode of The Weekly Briefing from Capital Economics features an exclusive extract from our client briefing on the global bond sell-off, its causes, consequences and where markets go from here. In this edited extract, Group Chief Economist Neil Shearing and Chief Markets Economist Jonas Goltermann answer questions from clients around the world, including:What was Scott Bessent’s Treasury market intervention intended to achieve, and why it has so far fallen short?What are the economic forces pushing investors to demand more compensation for holding long-dated government bonds?Which economies are most exposed to a fiscal crisis?Is the AI credit boom affecting demand for government debt?How high could bond yields rise from here?Related contentRead: How to think about the bond market sell-offhttps://www.capitaleconomics.com/publications/global-economics-focus/how-think-about-bond-market-sellRead: What taxes could Burnham raise to fund his policy ambitions?https://www.capitaleconomics.com/publications/uk-economics-update/what-taxes-could-burnham-raise-fund-his-policy-ambitions

Have a couple of softer US inflation prints taken a post-Summer Fed rate hike off the table? Did that CPI and PPI data vindicate Kevin Warsh’s divisive approach to central bank communications? And what does the death of former Premier Zhu Rongji tell us about China’s political economy today?Group Chief Economist Neil Shearing joins David Wilder to discuss the US inflation and rate outlook, the angst at the long end of the Treasury yield curve, and why the pace and nature of reform in China today not only pales in comparison what was happening at the turn of the century, but could threaten global economic stability.Also on the show, Deputy Chief UK Economist Ruth Gregory discusses her widely covered report on how much tax Andy Burnham could be seeking to raise in October’s Budget. She explains how the potential tax increases compare with the controversial big Budget of 2024, which taxes could rise and what the impact could be on the UK economy.Related contentWhat taxes could Burnham raise to fund his policy ambitions?https://www.capitaleconomics.com/publications/uk-economics-update/what-taxes-could-burnham-raise-fund-his-policy-ambitionsCapital Economics eventshttps://www.capitaleconomics.com/events

A jam-packed episode begins with Group Chief Economist Neil Shearing joining David Wilder to discuss what a surprisingly weak US employment report means for expectations that the Federal Reserve will cut interest rates in September.Neil and David are then joined by Chief Markets Economist Jonas Goltermann to unpack the implications of coordinated US-Japanese intervention to halt the yen's slide. They discuss everything from Prime Minister Takaichi's policy agenda and its impact on market perceptions of the currency to whether Scott Bessent's move was also intended to send a message to Beijing about an undervalued renminbi.Finally, Senior Emerging Markets Economist Liam Peach examines the latest update to our EM Financial Risk Indicators, highlighting where we see the greatest risks of a crisis and why, despite the recent energy shock, most emerging markets have remained remarkably resilient.Related contentHow worried should investors be about Takaichi’s policies?https://www.capitaleconomics.com/publications/japan-economics-focus/how-worried-should-investors-be-about-takaichis-policiesYour questions on Japan’s markets answeredhttps://www.capitaleconomics.com/publications/fx-markets-update/your-questions-japans-markets-answeredEM Financial Risk Monitor (Jul. 2026)https://www.capitaleconomics.com/publications/emerging-markets-financial-risk-monitor/em-financial-risk-monitor-jul-2026

Kevin Warsh sent financial markets into turmoil with a press conference that muddied, rather than clarified, the Fed's message. But was the confusion all part of a broader strategy from a Federal Reserve chair who takes a dim view of forward guidance? On the latest episode of The Weekly Briefing from Capital Economics, Group Chief Economist Neil Shearing joins David Wilder to discuss why he doesn't think the new chair deserves the benefit of the doubt, and why clearer communication will be essential if the Fed is to preserve its inflation-fighting credibility.Also on the show, Chief Europe Economist Andrew Kenningham explains why, despite the horrific scenes unfolding across southern Europe, this summer's wildfires are likely to have only a limited economic impact.Related contentThe renminbi could not rebalance China on its ownhttps://www.capitaleconomics.com/publications/china-economics-update/renminbi-could-not-rebalance-china-its-ownLittle macroeconomic impact of horrific wildfireshttps://www.capitaleconomics.com/publications/europe-economics-update/little-macroeconomic-impact-horrific-wildfires

Group Chief Economist Neil Shearing unpacks another turbulent week for the global economy. He talks to David Wilder about the latest escalation in the US trade war, the economic fallout from rising tensions with Iran and higher oil prices and why the AI investment boom continues to reshape growth in the US and China.Trade war: What's behind the Trump administration's latest tariff announcements and why global trade has remained surprisingly resilient.Shooting war: After oil $100 a barrel again, what are the implications for inflation and central banks if tensions in the Middle East continue to escalate?AI boom: How AI investment is now the major driver of growth in both the US and China, and what happens if the boom turns to bust? Related contentFed preview: Rate hikes coming, but not until Septemberhttps://www.capitaleconomics.com/publications/us-fed-watch/rate-hikes-coming-not-until-septemberBank of England preview: BoE to hold rates as energy prices keep rate hikes in playhttps://www.capitaleconomics.com/publications/boe-watch/boe-watch-boe-hold-rates-energy-prices-keep-rate-hikes-playWhat is the future of US tariffs?https://www.capitaleconomics.com/publications/global-economics-update/what-future-us-tariffs

The collapse of the US-Iran ceasefire has triggered another spike in oil prices and put markets back on edge. Neil Shearing joins David Wilder to discuss whether the world is heading for another oil shock and what it would mean for growth and inflation. He also explains how Kevin Warsh's warning that the Fed has "no tolerance for persistently elevated inflation" could translate into policy.Also on the show, Julian Evans-Pritchard unpacks China's disappointing Q2 GDP figures, including the role AI is playing in shoring up activity, explains why the People's Bank of China isn't more concerned about slowing credit growth and discusses what to expect on the stimulus front.Related contentThe implications of a renewed closure of the Straithttps://www.capitaleconomics.com/publications/global-economics-update/implications-renewed-closure-straitGlobal Economic Outlook: US strength points to renewed policy divergencehttps://www.capitaleconomics.com/publications/global-economic-outlook/us-strength-points-renewed-policy-divergence-0UK Drop-In: The Burnham government – will policy ambition collide with economic reality?https://www.capitaleconomics.com/events/uk-drop-burnham-government-will-policy-ambition-collide-economic-realityWhy Burnham will struggle to revive UK growthhttps://www.capitaleconomics.com/publications/uk-economics-focus/why-burnham-will-struggle-revive-uk-growth

It's far too soon to be worrying about another spike in inflation from renewed fighting in the Middle East. That's one of the key messages from Capital Economics' Global Chief Economist Jennifer McKeown, who joins David Wilder on The Weekly Briefing with Neil Shearing away this week.Jenny explains what could drive the Fed to raise interest rates as early as September, whether economies on both sides of the Atlantic can continue to hold up and where we think the consensus is wrong on the outlook for interest rates.Also on the show, in an exclusive excerpt from a recent online client briefing on AI, Chief Economic Adviser Vicky Redwood explains where the technology's impact is already showing up in the data, and what happens to the global economy if AI's promised productivity gains never materialise.Related contentCapital Economics Key Issues: AIDrop-In: AI's global shockwaves – Macro and market implications

For the past three years, our Markets team has been more optimistic than most about the AI-driven rally in global equities. That view has been borne out by events. Now they believe the rally has entered its final phase and that a sharp downturn will follow.  On this week's The Weekly Briefing, Chief Markets Economist Jonas Goltermann explains why we think the correction is coming in 2027, what to expect before the plunge and whether the Fed will play a role in the rally's demise. Also on the show, Climate and Commodities Economist Hamad Hussain discusses why our long-standing forecast that gold prices would retreat from their record highs is playing out, and why prices have further to fall from here.Related content:Drop-In: AI's global shockwaves – Macro and market implicationsAsset Allocation Outlook: The AI equity boom reaching its final inningshttps://www.capitaleconomics.com/publications/asset-allocation-outlook/ai-equity-boom-reaching-its-final-inningsCommodities Outlook: Beyond Hormuz – the path back to an oil gluthttps://www.capitaleconomics.com/publications/commodities-outlook/beyond-hormuz-path-back-oil-glut

Our flagship Global Economic Outlook is just around the corner, and in this latest episode of The Weekly Briefing, Group Chief Economist Neil Shearing previews our view of a world in which some economies are benefiting from the AI investment boom while others are falling behind. He also discusses what to expect from next week’s US employment report and why markets are underestimating just how hawkish the Fed may need to remain to bring inflation back to target.Also on the show, with Andy Burnham’s 'coronation' as the UK’s next prime minister looking increasingly likely, what do we know about the new government’s plans? Paul Dales and Ruth Gregory from our UK team discuss the fiscal constraints that will limit a Burnham government’s spending ambitions, while explaining why falling inflation could allow the Bank of England to deliver much more monetary easing than markets currently expect.Related contentUK Economic Outlook: Fall in inflation to 2.0% in 2027 to trigger rate cutshttps://www.capitaleconomics.com/publications/uk-economic-outlook/fall-inflation-20-2027-trigger-rate-cutsCapital Economics Eventshttps://www.capitaleconomics.com/events

A peace deal that's already showing signs of strain. Central bankers still wrestling with inflation. A new Fed chair seeking reform. And a UK local election with implications for the bond market.It’s been a busy week for macro and markets, and Group Chief Economist Neil Shearing joins David Wilder to make sense of it all. Neil explains what the increasingly fragile US-Iran peace deal means for global oil supplies and the outlook for inflation and interest rates.  In his discussion, Neil reviews Kevin Warsh's first meeting as Fed chair, considers the outlook for US interest rates, examines mounting trade tensions between Europe and China, and explains why the UK's next prime minister may find fiscal promises difficult to keep. 

Relatively strong US growth, sticky inflation and a resilient labour market have strengthened the case for further Fed tightening. In this week's episode of The Weekly Briefing, Chief North America Economist Stephen Brown tells David Wilder why rates may rise again before year-end and what to expect from Kevin Warsh's first meeting as Fed Chair.Before that, it's Groundhog Friday, as Donald Trump again talks up an imminent deal to reopen the Strait of Hormuz. But what if this time it really is for real and a US-Iran deal does get done? Group Chief Economist Neil Shearing discusses how the outlook could shift if energy starts flowing again, but also explains the economic risks if any deal later falls apart as crude reserves run down.Related contentFed on hold as Warsh faces a fractious FOMCBoE may not follow the central bank crowd in raising ratesBoJ on track to hike despite Ueda’s absence

Are we moving towards Fed rate hikes? Even before the release of a strong May US employment report, Group Chief Economist Neil Shearing joined The Weekly Briefing to explain why shifting dynamics on the FOMC mean the Federal Reserve could emerge from the summer weighing the need for tighter policy to contain inflation.Plus, after another extraordinary surge in AI stocks, Chief Economic Adviser for Financial Markets John Higgins discusses how much further the rally could run, whether current earnings growth is sustainable and what could ultimately burst the stock market bubble.Related contentBar to Fed hikes appears relatively lowCapital Economics events

This could prove another false dawn, or the US and Iran could finally reach an agreement to reopen the Strait of Hormuz to oil and gas shipments. But even if the strait reopens, energy flows, oil prices and, by extension, inflation won’t snap back quickly to pre-war levels.Group Chief Economist Neil Shearing and Chief Climate & Commodities Economist David Oxley join the latest episode of The Weekly Briefing to discuss the new normal for global energy markets and what it means for the world economy.They explain why inflation pressures are still likely to build in the weeks ahead, even as market expectations for central bank responses have tempered in recent days. And they discuss how governments and the energy industry are now scrambling to build alternative supply routes and reduce the Strait of Hormuz’s potency as a geopolitical choke point.

This latest wobble in the bond market almost certainly won’t be the last. Group Chief Economist Neil Shearing and Chief Markets Economist Jonas Goltermann join David Wilder on the latest episode of the Weekly Briefing to discuss the forces that have driven bond yields to multi-year highs. They examine shifting perceptions around inflation as the closure of the Strait of Hormuz drags on, the fiscal worries gnawing away at investor sentiment across the advanced economies and we're entering a world where inflation settles structurally higher than the 2% era policymakers once took for granted. And with Japan’s yield curve steepening sharply, they also discuss whether investors are beginning to question the Bank of Japan’s grip on reflation. Also on the show, India economist Shilan Shah calls in from Mumbai to discuss how record temperatures and the global energy shock are complicating the Reserve Bank’s efforts to contain inflation pressures. He discusses the risks7 facing the rupee, the prospect of tighter monetary policy, and how the current dilemma compares with crises past. Related contentWatch: Markets Drop-In: AI-driven paradigm shift or dotcom bubble redux? What’s next for equitieshttps://www.capitaleconomics.com/events/markets-drop-ai-driven-paradigm-shift-or-dotcom-bubble-redux-whats-next-equitiesRead: Heatwave completes trifecta of risks for Indiahttps://www.capitaleconomics.com/publications/india-economics-update/heatwave-completes-trifecta-risks-indiaExplore: Fiscal Riskshttps://www.capitaleconomics.com/key-issues/fiscal-risks

Westminster is gripped by the game of thrones around Labour's slow-mo leadership drama, which could deliver the UK's seventh prime minister in ten years. But for markets and the economy, the stakes are very real. Chief UK Economist Paul Dales tells David Wilder why. He says all the leading contenders to replace Starmer would, to varying degrees, open the spending taps but also explains why the bond market is likely to push back hard. Paul also makes the case for the UK's medium-term outlook looking brighter than many assume, though not because of who's in charge of the country.Also on the show, Group Chief Economist Neil Shearing discusses why the latest activity data suggest the global economy has so far proved surprisingly resilient in the face of the Iran conflict – and why that resilience could soon be tested. 

Donald Trump travels to Beijing next week for a long-awaited summit with Xi Jinping that carries huge geopolitical significance, but one where investors should keep expectations firmly in check. Group Chief Economist Neil Shearing and Head of China Economics Julian Evans-Pritchard join David Wilder to assess the state of the US-China relationship and why any apparent thaw in tensions may prove superficial. They discuss issues including: Why Beijing increasingly sees the US as a power in relative decline, and how that is shaping Chinese strategy;  Why the structural forces pushing the US and China apart are likely to outlast any short-term diplomatic reset;  What’s driving the recent improvement in China’s economy, and how that could exacerbate global tensions. Also on the show, Chief Europe Economist Andrew Kenningham returns from client meetings in Germany to explain why those who had been expecting an economic turnaround last year have been left disappointed, but to also argue that the prevailing gloom around both the German economy and its politics has become excessive.Related content:Read: What would a new PM mean for the UK economy and markets?https://www.capitaleconomics.com/publications/uk-economics-update/what-would-new-pm-mean-uk-economy-and-marketsRegister: Drop-In: Is the energy shock supercharging the Chinese export boom?https://www.capitaleconomics.com/events/drop-energy-shock-supercharging-chinese-export-boomRead: Taking stock of the German fiscal stimulushttps://www.capitaleconomics.com/publications/europe-economics-update/taking-stock-german-fiscal-stimulusRead: Fiscal stimulus won’t fix Germany’s economyhttps://www.capitaleconomics.com/publications/europe-economics-focus/fiscal-stimulus-wont-fix-germanys-economy

A day after Brent crude surged above $120 per barrel, Group Chief Economist Neil Shearing and Deputy Chief Emerging Markets Economist Jason Tuvey discuss how long the conflict in the Middle East could continue and why Iran’s collapsing economy is not a reliable guide to when the regime might capitulate.Speaking with David Wilder, they also explore how central bankers are navigating the inflation risks posed by a prolonged disruption to energy supply, as well as what the UAE’s departure from OPEC could mean for oil markets and what it signals in a world of intensifying US–China competition.And in a packed week for equities investors, Chief Markets Economist Jonas Goltermann assesses how key Big Tech earnings reports have landed and explains why bonds have not been performing nearly as well as equities.Related contentRead: How long can Iran hold out?https://www.capitaleconomics.com/publications/middle-east-north-africa-economics-update/how-long-can-iran-hold-outRead: Forecasting through the fog of warhttps://www.capitaleconomics.com/publications/global-economic-outlook/forecasting-through-fog-war-1

The Iran conflict is approaching its third month, the Strait of Hormuz remains closed and oil is back above $100 per barrel. How safe is the assumption that this will all be resolved soon, and what happens to commodity prices, growth and inflation if it isn’t?In the latest episode of The Weekly Briefing, Chief Global Economist Jennifer McKeown and Chief Climate & Commodities Economist David Oxley join David Wilder to unpack the macro and market assumptions behind our ‘adverse’ conflict scenario. They discuss how far commodity prices could rise and whether that risks tipping the global economy into recession – but also why some of the latest data suggest the initial macro hit from the energy shock may not have been as severe as first feared.Also on the show, the upcoming Federal Reserve meeting could mark Jerome Powell’s final one as Chair. With Kevin Warsh waiting in the wings, Chief North America Economist Stephen Brown considers Powell’s legacy, but also the policy implications of a change in Fed leadership. That includes why Warsh could push for a different inflation gauge to target, but also why tensions with the White House may not go away. Related contentRead: Powell’s departure upstaged as Warsh readies Fed revamphttps://www.capitaleconomics.com/publications/us-fed-watch/powells-departure-upstaged-warsh-readies-fed-revampDrop-In: The Fed, ECB and Bank of England – Signals from the April meetingshttps://www.capitaleconomics.com/events/drop-fed-ecb-and-bank-england-signals-april-meetingsIran conflict: Global macro and market implicationshttps://www.capitaleconomics.com/key-issues/iran-conflict

Global imbalances are back. But how serious is the threat this time, and could they trigger the next phase of global economic instability? Group Chief Economist Neil Shearing joins David Wilder to unpack what is driving balance of payments positions to worrying extremes, why a more fragmented and volatile world raises the stakes, and why Donald Trump and Xi Jinping are unlikely to take meaningful steps to address these tensions when they meet next month.Also on the show, Deputy Chief EM Economist Jason Tuvey examines the economic shock hitting Gulf economies as a result of the Middle East conflict, and what it means for their long-term development ambitions.Related contentDrop-In: China’s shock to the eurozone – economic fallout and policy choiceshttps://www.capitaleconomics.com/events/drop-chinas-shock-eurozone-economic-fallout-and-policy-choicesCan China’s trade surplus rise further?https://www.capitaleconomics.com/publications/china-economics-update/can-chinas-trade-surplus-rise-furtherWar dealing a heavy blow to the Gulf economieshttps://www.capitaleconomics.com/publications/middle-east-north-africa-economics-update/war-dealing-heavy-blow-gulf-economies

The latest Weekly Briefing covers the global outlook, financial markets and energy. Group Chief Economist Neil Shearing explains what the ceasefire in the Middle East means for growth and inflation, how quickly the world economy could recover if it holds, and what happens if fighting resumes.James Reilly, a Senior Economist on our Markets team, joins to run through updated forecasts for equities and bonds, why markets have held up relatively well, and why the stock market highs expected before the war now look out of reach.Plus, in an exclusive clip from a recent client briefing, our Climate & Commodities team explain why restoring oil supply is not as simple as flicking a switch, and the constraints on refined product output.Related Iran conflict: Global macro and market implicationshttps://www.capitaleconomics.com/key-issues/iran-conflictWatch: How the Middle East conflict has changed the price outlookhttps://www.capitaleconomics.com/events/commodities-drop-how-middle-east-conflict-has-changed-price-outlookMapping the next stage of the AI rallyhttps://www.capitaleconomics.com/publications/equities-focus/mapping-next-stage-ai-rallyGet trial access: https://www.capitaleconomics.com/solutions/subscription-products#trial-request

The AI hype cycle shows no sign of slowing. But how much are the hundreds of billions in investment actually boosting economies, and when will that spending translate into meaningful productivity gains?In this episode, Senior Economic Adviser Vicky Redwood discusses her new report, 'How deeply is AI taking hold in the economy?', the latest addition to Capital Economics’ analysis of AI’s global impact. In conversation with David Wilder, she separates hype from reality, covering: Which economies are benefiting most from the global AI build-out  Why recent US productivity gains are evidence of AI’s impact  If the conflict in the Middle East could disrupt the AI rollout  Whether fears of an AI-driven jobs apocalypse are justified  What the Citrini note gets wrong about AI’s macro impactRead 'How deeply is AI taking hold in the economy?': https://www.capitaleconomics.com/publications/global-economics-focus/how-deeply-ai-taking-hold-economy

Our updated macro and market forecasts assess the impact on growth and inflation – and the likely central bank response – under both baseline and adverse scenarios for the Middle East conflict. In the latest episode of The Weekly Briefing from Capital Economics, Group Chief Economist Neil Shearing discusses why the more benign scenario would deliver a negative but manageable shock to the global economy, while a more adverse outcome could tip it into outright recession.Also on the show, Deputy Chief UK Economist Ruth Gregory explains why gilts have been the hardest hit among G10 government bonds as tensions have escalated. She explores the sharp shift in expectations for Bank of England policy and the underlying fiscal vulnerabilities fuelling market anxiety – including the risk of a change in government leadership.Read our latest Global Economic Outlook: https://www.capitaleconomics.com/publications/global-economic-outlook/forecasting-through-fog-war-1

Pity the poor central banker. As energy prices surge, they are grappling with the trade-off between growth and inflation, while trying to communicate this all to markets without triggering an unwanted tightening in financial conditions.At the end of an unusually busy week for policy meetings, Group Chief Economist Neil Shearing and Chief Global Economist Jennifer McKeown assess how central banks are managing this difficult task, and whether investors are right to position for rate hikes from some banks that only a few weeks ago were expected to ease policy this year.In the latest episode of The Weekly Briefing, they talk to David Wilder about issues including:How inflation risks in the global economy are crystallising as the conflict approaches its fourth weekWhat separates central banks, from the Bank of England and ECB to the BOJ, RBA and the Fed, in how they are likely to respondWhether interest rate cuts would come back onto the table if the fighting were to endJoin our 26th March online briefings about our new macro and market forecasts: https://www.capitaleconomics.com/events/drop-global-economic-and-market-outlook-pricing-energy-shock

News of a record release of emergency oil reserves has quickly been overshadowed by images of tankers on fire in the Strait of Hormuz. Thirteen days into the conflict, tensions in the Middle East appear to be escalating rather than easing. What is the view from commodity and financial markets, and what could this mean for the global economy?Capital Economics has modelled three scenarios to assess how oil and gas supplies and prices could evolve as the conflict unfolds, and what this might mean for global growth, inflation, central bank policy and financial markets.In this special episode of The Weekly Briefing:Chief Climate & Commodities Economist David Oxley discusses how our scenarios map out potential paths for oil and gas supply and prices, depending on the duration of the conflict and the extent of damage to production and infrastructure.Group Chief Economist Neil Shearing explains how these scenarios could translate into different growth and inflation outcomes globally, and what they might mean for central bank policy — including what to expect from the upcoming meetings of the Fed, Bank of England, ECB and Bank of Japan.Deputy Chief Markets Economist Jonas Goltermann explores how financial markets could respond, how far prices might rebound in the event of a ceasefire, and which trades may never fully recover.Explore all our coverage of the conflict, including our scenarios here: https://www.capitaleconomics.com/key-issues/iran-conflictInterested in trial access? Email us at [email protected]

Conflict in the Middle East, a surge in oil and gas prices, and a surprise drop in US payrolls – it’s been a turbulent week for the global economy.In the latest episode of The Weekly Briefing, Capital Economics Group Chief Economist Neil Shearing joins David Wilder to discuss what the spreading Middle East conflict and sharp spike in energy prices mean for global growth and inflation, and why the latest US jobs report may not signal a major slowdown.Later, Senior Climate and Commodities Economist Kieran Tompkins explains the scale of disruption in global oil and gas markets, whether alternative supply can offset the shock and what the longer-term implications could be for energy markets.Read all our key insight into the Middle East conflict here:https://www.capitaleconomics.com/key-issues/iran-conflictGet in touch for a trial to our platform:[email protected]

Amid widening conflict in the Middle East, our economist team held an online briefing first thing Monday to tackle some of the key questions that clients have been asking. In this edited clip from that briefing, you’ll hear the team tackle issues, including:The extent of disruption to traffic through the Strait of Hormuz and the implications for oil and gas prices;The point at which rising oil prices would force central banks to slow or abandon policy easing;The dollar as a safe haven currency in this time of geopolitical upheaval;How this conflict could shape the economic outlook for the GCC economies;The likelihood that a change of leadership in Tehran could open the way for a deal with the US.With: Jennifer McKeown (Chief Global Economist), William Jackson (Chief EM Economist), David Oxley (Chief Climate & Commodities Economist), Jonas Goltermann (Deputy Chief Markets Economist). Note: This client briefing was held at 1000 GMT/1800 SGT on Monday, 2nd MarchSee our dedicated Iran conflict page below for more key analysis, and contact us at [email protected] to find out about access. https://www.capitaleconomics.com/key-issues/iran-conflict

Is China’s latest Five-Year Plan about to reset its economic model and tackle the imbalances weighing on both the domestic and global economy?Speculation always builds ahead of a new Five-Year Plan. But this time, the stakes feel higher. With growth slowing, debt risks lingering and external tensions elevated, could this Plan mark a genuine turning point?That is what Julian Evans-Pritchard will be watching for as the National People’s Congress opens in Beijing on Thursday. On The Weekly Briefing, he joins Group Chief Economist Neil Shearing to talk to David Wilder about the outlook for China’s domestic and external imbalances and to address the key questions, not least how this adjustment will proceed, how willing its trading partners will remain to absorb China's goods surplus and whether this all risks tipping the world into crisis?Elsewhere in the episode, Megan Fisher from our Commodities team revisits the cocoa price boom she had long warned was unsustainable. Now that prices have collapsed, she sifts through the fallout to explain what comes next and whether chocoholics are likely to see any relief.Events and analysis referenced in this episodeChina NPC Drop-In https://www.capitaleconomics.com/events/china-drop-key-takeaways-npc-and-new-five-year-planUK Spring Statement Drop-Inhttps://www.capitaleconomics.com/events/uk-drop-chancellors-spring-statement-fiscal-signals-political-risks-market-implicationsUS non-farm payrolls previewhttps://www.capitaleconomics.com/publications/us-employment-report-preview/health-care-likely-be-key-driver-payrolls-again

The Supreme Court has finally ruled on Donald Trump's tariffs with an opinion that the president has no right to impose tariffs under the International Emergency Economic Powers Act. So what happens now?Deputy Chief North America Economist Stephen Brown and Deputy Chief Markets Economist Jonas Goltermann join The Weekly Briefing from Capital Economics to discuss the implications of this legal ruling for the US economy, for Federal Reserve policy and for financial markets. In their conversation with David Wilder, Stephen and Jonas address key issues, including:How the White House could rebuild its tariff regime – and rebuild it quicklyWhat happens when billions of dollars in tariff refunds flow back into US company accounts Why signs of resurgent inflationary pressures are narrowing the room for Fed rate cutsHow the bond market is responding to the Supreme Court newsWhy the stock market rally has stalled, and whether this news could get it going again.Related readingIEEPA ruling unlikely to pull PCE inflation back to 2%https://www.capitaleconomics.com/publications/us-economics-weekly/ieepa-ruling-unlikely-pull-pce-inflation-back-2Stock market rotation is a warning of trouble aheadhttps://www.capitaleconomics.com/publications/capital-daily/stock-market-rotation-warning-trouble-aheadSC rules that Trump's IEEPA tariffs are illegalhttps://www.capitaleconomics.com/publications/global-economics-rapid-response/sc-rules-trumps-ieepa-tariffs-are-illegal

From the lows of December retail sales to the highs of January payrolls, recent US data has sent mixed signals. But the economy remains in relatively good shape, argues Deputy Chief North America Economist Stephen Brown on the latest episode of the Capital Economics Weekly Briefing. He explores why the idea of a “K-shaped” economy may be overstated, what markets are missing about the productivity growth upturn, and the chances of much lower rates from a Kevin Warsh-led Fed. Also on the show, as Keir Starmer’s government reels from one of its toughest weeks yet, Deputy Chief UK Economist Ruth Gregory assesses what a change of leadership could mean for the UK economy and financial markets, but also why the long-term growth outlook may not be as bleak as recent headlines suggest.Related reading:AI already making a big contribution to US productivity growthWhy we still believe in the AI rally, and the S&P 500Would a stock market crash cause a global recession?Can China’s trade surplus rise further?Get in touch at [email protected] to learn more. 

In this week’s episode, Neil Shearing talks to Vicky Redwood and John Higgins about a tumultuous week in equity markets, how AI is creating winners and losers, and whether there’s any evidence that AI is starting to lift productivity growth in economies. AI already making a big contribution to productivity growthChina’s AI rollout could rival the US

This weekend’s Japanese election is shaping up to be one of the most consequential in years. As Sanae Takaichi, newly installed leader of the ruling Liberal Democratic Party, seeks to cement her mandate, government bond yields and the yen have been moving in opposite directions amid headlines warning of plans to open the fiscal floodgates.But are markets really responding to fears of runaway spending, or to the reality that Japan is finally emerging from decades of deflation? Capital Economics’ Head of Asia-Pacific, Marcel Thieliant, and Head of Asia-Pacific Markets, Thomas Mathews, join the show to unpack what the return of inflation means for the Japanese economy, for the Bank of Japan, for government bonds and for the outcome of this weekend’s vote.Also on the show: a new US-India deal to slash eye-watering reciprocal tariff rates is the latest in a flurry of trade agreements from the Modi administration. Shilan Shah, our India research lead, explains what these deals mean for India’s economic outlook – and whether the country can truly wean itself off Russian oil.Read our key analysis about the return of inflation to Japan's economy.For Capital Economics clients: Japan Drop-In: Takaichi’s election gamble – Fiscal risks, market consequences

Kevin Warsh has been named Donald Trump’s pick to succeed Jerome Powell as Chair of the Federal Reserve. Group Chief Economist Neil Shearing, Deputy Chief North America Economist Stephen Brown, and Deputy Chief Markets Economist Jonas Goltermann come together for a special episode of The Weekly Briefing to address the key questions raised by this announcement, including:Whether Warsh would deliver the kind of monetary easing Trump has been calling for;How Warsh's call to shrink the Fed’s balance sheet would work, and what that could mean for Treasury yields;The implications for the dollar following an extraordinary week in currency markets.

Was this the week that shattered the western alliance? Not so fast, says Group Chief Economist Neil Shearing. Despite the strains of a Trump presidency, deep economic dependencies on the US suggest that talk of a new international order is overblown. Neil cuts through the Davos rhetoric to explain the reality of the current global macro landscape.Later in the show, as the fourth anniversary of the invasion of Ukraine approaches, Senior EM Economist Liam Peach explains what many get wrong about Russia’s economy. He explores how initial resilience has finally given way to weakness, but also why this shift is unlikely to force Putin into meaningful concessions to end the war.Referenced in this episode:Analysis hub: Japan's reinflationary reawakeningDrop-In: The shape of the fractured world in 2026EM Financial Risk Indicators

Can you pitch yourself as a responsible global stakeholder at the same time as running a $1.2 trillion trade surplus? That’s China’s big global macro play, and it’s one that Neil Shearing thinks China is going to struggle to pull off. The Group Chief Economist of Capital Economics is on The Weekly Briefing to explain what that mammoth trade imbalance means for advanced and emerging economies in a fracturing global economy, including why some EMs are doing quite well as a result of all of the geoeconomic ructions.Also on the show, there’s an awful lot of noise around the race for AI leadership between the US and China, but how to separate out the hype from the reality? China Economist Leah Fahy’s new report sizes up the progress that Chinese AI has made since the launch of DeepSeek a year ago, and the impact that Beijing’s race for tech supremacy will have on the country’s economic outlook.Six non-consensus calls for China for 2026China’s AI rollout could rival the USDrop-In: The shape of the fractured world in 2026The economic and market impact of AI

The first trading week of 2026 has been a whirlwind of geopolitical shocks and big economic developments. Group Chief Economist Neil Shearing is back on The Weekly Briefing to break down an historic start to the year, including:The Maduro capture: Neil provides much-needed macro and market context behind the news of Nicolás Maduro’s capture in Venezuela.AI and US productivity impacts: Whether the "stunning" Q3 US productivity numbers suggest massive AI investments are moving the needle for the US economy – and whether other economies will soon start feeling the benefit.The labour market and the Fed: A review of the December payrolls report and what it could mean for the Fed.Also on the show: David Oxley and Kieran Tompkins from our Commodities team join us to make sense of a volatile week in the oil market. They discuss the reality behind expectations for a surge in Venezuelan oil flows onto the global market.

This recovery in commercial real estate is unique. Across the US, Europe, and Asia, it has been defined by persistent weakness in both investment and prices. On this special episode of The Weekly Briefing, Chief Real Estate Economist Kiran Raichura and Senior Real Estate Economist Amy Wood join David Wilder to discuss whether this weakness will persist through 2026 and where investors can still find outperformance. Kiran and Amy address:Why higher-for-longer interest rates remain the primary determinant of returns for most clients.What is required to bridge the gap between seller and buyer price expectations.Which traditional sectors offer the best returns, and which alternatives will provide significant outperformance.Why private credit markets represent the greatest downside risk to commercial real estate in 2026.Further reading:Key themes for global commercial real estate in 2026Global Commercial Property Chartpack (Q4 2025)

The final major week of the year in macro is in the books. Group Chief Economist Neil Shearing joins The Weekly Briefing to explain why the latest US inflation report should be taken with a “bucketful of salt,” while reviewing the year-end moves from the BoE, BoJ, and ECB. He reviews the latest moves from the Bank of England, the Bank of Japan, and the ECB, and talks about why a growing Chinese trade surplus has a corresponding deficit that could present a key risk to global macro stability.Plus, Deputy Chief Markets Economist Jonas Goltermann discusses one of our most prominent calls for 2026: why, despite recent wobbles, the AI-driven equities bubble will continue to inflate.

In this special episode of The Weekly Briefing podcast, Group Chief Economist Neil Shearing and Chief Global Economist Jennifer McKeown outline Capital Economics' expectations for 2026.They tackle the key drivers and risks in the year ahead, examining how the AI narrative will unfold, why the US will be a notable outperformer, how much further China’s exporters can take market share and why a new Fed chair probably won’t deliver the rate cuts that Donald Trump wants.Learn more: The World in 2026 homepage

The year began amid optimism that Europe was finally prepared to meet its economic potential. But as the end of 2025 approaches, how much has actually changed in the European story of weak growth and political fragmentation? In this special episode of The Weekly Briefing from Capital Economics, Chief Europe Economist Andrew Kenningham and Group Chief Economist Neil Shearing join David Wilder to what has – and hasn’t – changed in the European outlook.They explore Europe’s challenges in navigating an increasingly fractured global economy, including whether its industries are equipped to handle competitive pressures from the US and China, the risks stemming from elevated public debt, and why the urgency to ramp up defence spending isn’t being met by action.Plus, in a clip from a recent client briefing, EM economists Liam Peach and William Jackson provide an update on the war in Ukraine and the latest White House efforts to broker a ceasefire.Analysis and events referenced in this episodeDrop-In: The World in 2026 - The global macro and market outlookSpotlight: The future of EuropeRead: ECB interest rates cuts doing little to boost growthWatch: China and Russia – The limits of the “no limits” partnershipRead: Russia & China: a “no limits” partnership with limits

After all the kite-flying, the doom-laden briefings and the policy U-turns, the UK Budget landed well with the markets. But did gilts rally simply because the news wasn’t worse, or has the government genuinely won over the bond vigilantes?  And for all the initial success in launching this Budget, where is the strategy that will lift the UK’s anaemic growth? Chief UK Economist Paul Dales and Deputy Chief UK Economist Ruth Gregory join David Wilder to assess the Budget’s impact, the economic fallout and why lingering political uncertainty still points to more bond-market volatility in 2026.Plus, Chinese fixed-asset investment is falling, prompting debate among China watchers about whether it's a sign the crackdown on price wars and overcapacity is biting. But China Economist Leah Fahy explains why there could be less to investment's weakness than the success of Beijing’s policies – and the latest reading of our China Activity Proxy helps show why. Analysis and events referenced in this episodeWatch: The Autumn Budget – What’s next for the economy and markets?Register: Autumn Budget – What does it mean for the property outlook?Read: Autumn Budget - Markets give the smaller-than-expected Budget the thumbs upExplore: The economic and market impact of AIRead: CAP: Growth slows, but industry still going strong

Is the bubble bursting? Despite a big earnings beat from Nvidia, concerns about overheated AI valuations are mounting. Jonas Goltermann weighs the risks that the equities rally is fading. We also look at what to expect from Rachel Reeves’ Budget after an unusually turbulent build-up, and the possible economic fallout. And Neil Shearing considers what this week’s Trump-Mohammed bin Salman meeting signals about Saudi Arabia’s position in a fracturing global economy.Analysis and events referenced in this episode:UK Drop-In: The Autumn Budget – What’s next for the economy and markets?What if the AI stock market boom turned to bust?Why we aren’t worried about US tech valuationsMbS’s Washington trip tips the balance in US’s favour

Where is the big macro payoff from the surge in artificial intelligence investment? And is AI wiping out entry-level jobs? The latest episode of The Weekly Briefing from Capital Economics unpacks these questions and examines what this new wave of technology really means for growth and labour markets.The episode also marks the reopening of the US government with a clear assessment of the economic outlook, and explores how fiscal risks are disrupting politics across the US and Europe. These pressures are set to shape policy debates well into 2026.Analysis and events referenced in this episodeRead: How to think about AI investmentRead: Has the AI “jobpocalypse” begun?Read: China summer investment slump likely to be short-livedWatch: EM Drop-In: India at the geo-economic crossroadsCapital Economics events

Who was Rachel Reeves really speaking to when she hinted at higher taxes this week? How much of a threat is the Supreme Court to Treasury tariff revenues? And how useful is “G2” as a lens for the new global order? Group Chief Economist Neil Shearing unpacks these big global macro questions in the latest episode of The Weekly Briefing from Capital Economics. Also on the show, Chief Markets Economist John Higgins assesses whether this week’s sell-off marks the end of the great AI-driven US equity boom, or was just a wobble on the way to new highs.Analysis and events referenced in this episodeRead: UK Autumn Budget 2025 PreviewRead: How could the Budget influence UK housing?Drop-In: India at the geo-economic crossroadsDrop-In: Commercial Property Outlook - What to watch out for in 2026Read: Reliance on tech is a double-edged swordRead: What to make of the mixed reaction to this week’s big-tech results

The Fed is trying to calibrate policy in the midst of a government shutdown that’s effectively cut off the flow of data. Jerome Powell says that when you’re driving in fog, you should slow down – but there’s still a case for the FOMC to follow this past week’s rate cut with another move in December, says Deputy Chief North America Economist Stephen Brown. He talks to David Wilder about why the state of the US economy argues for another cut this year, but fewer in 2026 than markets currently expect.That Fed meeting wasn’t the week’s only big event. In Korea, Donald Trump held the first face-to-face meeting of his second term with Xi Jinping. The one-year truce resulting from that meeting has eased near-term US-China trade tensions, but much could still go wrong, warns China Economist Leah Fahy. She discusses what might plunge bilateral relations back into crisis, the health of China’s economy, and why – even if Washington clears Chinese firms to buy cutting-edge AI chips – they may not do so.Analysis and events referenced in this episode:Drop-In: The Fed, ECB and Bank of England – Latest decisions and policy outlookCapital Economics EventsRead: Fed cuts and ends QT, but further loosening not guaranteedRead: Bank of Canada cuts but thinks it has done enoughXi-Trump talks buy China time to decouple at its own paceThe economic and market impact of AI

Out of the darkness of a shuttered US government comes a rare data release – and it’s a CPI report that’s given markets some relief as the week draws to a close. But does September’s inflation data really clear the way for Fed rate cuts in December as well as October, as investors now expect?In this week’s episode of The Weekly Briefing from Capital Economics, Group Chief Economist Neil Shearing explains why the Fed is likely to stay cautious, previews key upcoming central bank meetings, and looks ahead to next week’s much-anticipated Donald Trump-Xi Jinping summit in South Korea.Also on the show, the US Treasury’s new sanctions on Russia’s two biggest oil exporters have brought a key risk to our below-consensus oil price forecasts to the fore. Chief Climate and Commodities Economist David Oxley discusses how much this move could shake up the outlook – and whether Trump will actually follow through with full enforcement.Analysis and events referenced in this episode:Read: China ramping up use of export controlsDrop-In: Argentina’s mid-term elections – A referendum on Milei’s reformsDrop-In: The Fed, ECB and Bank of England – Latest decisions and policy outlook

In just a few days, US–China relations have taken a troubling turn. How did we go from the goodwill of the London and Madrid bilaterals to the current war of words, the threats and the counter-threats? Is this simply pre-APEC brinkmanship, or the start of a more fundamental breakdown in relations between Washington and Beijing? And how great are the risks of a miscalculation that spills over into the global economy? In this special episode of The Weekly Briefing from Capital Economics, Group Chief Economist Neil Shearing and Head of China Economics Julian Evans-Pritchard discuss the past, present and future of US–China relations. They explore key questions, including:• What’s driving Beijing’s new controls on rare earths, and whether the government could reverse course• What’s wrong with US perceptions of China’s economic health – and why those perceptions could prove dangerous • How the global economy will need to keep adjusting to a fracturing US-China relationshipAnalysis referenced in this episodeThe fracturing of the Global EconomyUS may revive plans to curb financial ties with ChinaGlobal Economics Outlook: US leads, others lag, in uneven global economyCAP: Economy holding up, but growth remains weakChina’s push for innovation is not lifting productivity

How reliant is the US economy on the AI investment boom? It’s a question Group Chief Economist Neil Shearing keeps getting in client meetings. On this episode of The Weekly Briefing, he tells David Wilder why there’s more to the story than hype around a new technology. Neil also explains why France faces a political – but not an economic – crisis, and what to make of China’s toughest moves yet to control rare earth exports.Also on the show, six months after Liberation Day, Deputy Chief Markets Economist Jonas Goltermann assesses how predictions of the dollar’s demise have played out and unpacks the market’s striking response to Japan’s new LDP leader.Analysis and events referenced in this episode:Watch: US Outlook – Weighing the AI boom, labour constraints and the Fed’s next chapterRead: China tightens its grip on rare earths (again)Register: Markets Drop-In: Asset Allocation in 2026 – Why we don’t think the AI equities boom is overRead: Japan coalition talksRead: What would PM Takaichi mean for Japan?

Our new Global Economic Outlook has just been published – and it makes for a striking contrast. In the US, the drag from Trump’s policy agenda looks set to be outweighed by an AI-driven investment boom that may already be lifting productivity. In Europe, by contrast, the optimism seen earlier this year has faded as structural headwinds continue to hold growth back.In this episode of The Weekly Briefing, Group Chief Economist Neil Shearing explores how AI may be transforming America’s potential, even as Europe struggles with long-standing weaknesses.Plus, a decade on from a devastating market crash, Asia-Pacific Markets head Thomas Mathews unpacks what’s been driving China’s equity boom this year – despite the broader economic weakness – and how sustainable it really is.Analysis and events referenced in this episodeGlobal Economic Outlook: US leads, others lag, in uneven global economyDrop-In: US Outlook – Weighing the AI boom, labour constraints and the Fed’s next chapterDrop-In: China Outlook – Can policy reverse economic weakness?The economic and market impact of AIMore upside for China’s stock market as its AI+ plan gets going

Tariffs are back in the headlines after Donald Trump’s latest announcements – but how much of a threat do these new levies really pose? Could they fuel inflation pressures, and is Trump’s trade policy really bringing manufacturing jobs back?Neil Shearing joins David Wilder to assess Trump’s tariff threats, explain why Stephen Miran’s call for US rates to be halved doesn’t add up, and examine what’s driving the divergence between inflation in the US and Europe/UK.Also on the show, Latin America Economist Kimberley Sperrfechter looks at an extraordinary week in Argentina, where markets have steadied after Washington intervened. What drove the Trump administration to act so forcefully, and will the support work?Analysis and events referenced in this episode:Data: Tariff Impact ModelRead: US Tariff AnnouncementRead: Japanese manufacturers starting to shift production to USRead: Euro-zone inflation risks now to the downsideDrop-In: From bonds to equities – The great pensions switch and its risksDrop-In: Where is r* heading? Catching up on equilibrium real ratesDrop-In: UK Outlook – More tax rises to add to economy’s woes​​Read: Mapping China’s presence in Latin America​