Macro Bytes

The independence of the Federal Reserve is under sustained attack from the Trump administration. But despite the totemic significance of the Fed to the global financial system, markets so far seem relatively sanguine. Luke and Paul discuss the history of independent central banks, why they matter so much to the economy, and what the journey to full fiscal dominance might look like. They also talk...

Stablecoins are digital assets often tied to the value of a fiat currency, such as the dollar. They have the potential to reshape the financial and economic order. In this episode, Luke and Paul discuss what they are, how they may affect the ways in which we pay for goods and services, how they are being regulated and what it might mean economically. In the spotlight are public sector debt dynamic...

US macro hasn’t taken the summer off. Between tariff threats and trade deals, slowing growth and massive jobs data revisions, and Trump firing the head of the statistics authority and getting an early pick for a new Fed “shadow Chair”, there’s a lot to catch up on. Luke and Paul explain what all this means for the economic outlook, markets, and monetary policy.  

Infrastructure is one of the foundations on which economies are built. It’s essential for meeting the needs of growing and ageing populations, it has a role to play in the defence build-outs that are required in a more volatile geopolitical environment, and its increasingly critical to the energy and climate transitions. New research from Aberdeen suggests at least $64 trillion will need to be spe...

The Trump administration is pursuing a significant fiscal expansion with its “One Big Beautiful Bill” Act. But with long-term bond yields rising, and Section 899 potentially making the US a less attractive place to invest, investor appetite to finance the US deficit may be waning. Paul and Luke discuss the size of the deficit increase, whether tariff revenue can offset tax cuts, and what Elon Musk...

The Argentinian economy has a history going back decades of chronically low growth, high inflation, and successive crises. However, President Javier Milei’s “shock therapy” of fiscal spending cuts, peso devaluation, and an IMF package, appear to be turning things around. The economy has returned to growth; inflation, while still high, has fallen sharply; and Argentina is gradually returning to int...

The US and China have significantly, albeit temporarily, reduced tariff rates. And the US has started to make tariff deals with other countries too, beginning with the UK. So does this mean that economic and market concerns about the trade war were overblown? Paul and Luke speak to Lizzy Galbraith and Bob Gilhooly about why US-China decoupling is still a long term trend, what next for tariff level...

The US has long been economically “exceptional”, with its high growth rate, dominant technology companies, and as the provider of the global safe asset and reserve currency.  However, Trump’s tariffs, a possible growth slowdown, and deeper institutional disfunction, could all endanger aspects of this. Paul Diggle and Luke Bartholomew ask whether US exceptionalism is over, whether the US is becomin...

President Trump has announced an enormous increase in US tariffs on the rest of the world. But is this a negotiating tactic that will see tariffs fall over time, or a permanent feature of the new global trading system? And given that most investors’ worst case tariff scenario has transpired, what other major shocks could these moves catalyse? Paul Diggle and Luke Bartholomew discuss the design of...

UK Chancellor Rachel Reeves has announced spending cuts to restore headroom against the government’s fiscal rules. Paul Diggle and Luke Bartholomew are joined by Lizzy Galbraith to discuss the welfare cuts the government has announced, how vulnerable the UK fiscal position is to tariffs and other shocks, and the possibility of future tax increases.

US consumer and business sentiment has fallen significantly recently in response to extremely elevated policy uncertainty with some indicators pointing to elevated recession risks. Luke Bartholomew speaks to James McCann about the sudden deterioration in economic sentiment and how reliable this is as guide to future growth, the current state of play on tariff policy, the impact of DOGE on the job...

The CDU-CSU has emerged as the largest party from the German federal elections, and Friedrich Merz will almost certainly become the next Chancellor at the head of a coalition government. But Germany faces profound economic and geopolitical headwinds, amid a contracting industrial sector and a chaotic European security situation. Paul and Luke speak to Lizzy Galbraith and Felix Feather about Merz’s...

Much like the effects of the French revolution, it may be too early to tell the long-term economic impacts of Brexit.  UK growth and investment have almost certainly been lower, and inflation higher, than otherwise. But as President Trump threatens to tear up the global trading system including targeting the EU with tariffs, and European regulation risks stifling the growth benefits of AI, Paul an...

Investors can be forgiven for having tariff whiplash, after the threat and then temporary reprieve of 25% US tariffs on Canada and Mexico, and the implementation of additional 10% tariffs on China. Paul and Luke speak to James McCann, Bob Gilhooly, and Lizzy Galbraith from the abrdn economics team about the thinking behind President Trump’s tariff strategy, the economic and monetary policy impacts...

  The US dollar is rising as investors price in Trump’s policy platform of tariffs, tax cuts, and deregulation. But key members of the new US administration want to see a weaker dollar to boost domestic manufacturing. Paul and Luke discuss this fundamental dilemma at the heart of the new administration’s economic policy, and how the US may exercise its full array of hard power tools to achieve eco...

Elon Musk is set to join the Trump administration as head of the Department of Government Efficiency. Paul and Luke speak to Lizzy Galbraith about the role and influence that Musk and DOGE may have over US fiscal policy, regulation, foreign policy, and the broader Trump agenda.

  The coming year is going to see more economic and geopolitical volatility for investors to navigate. Paul asks members of the abrdn economic research team to outline the big questions they are asking as we head into 2025 – including President-elect Trump’s policy choices, the prospect of ceasefires in Ukraine and the Middle East, and whether the UK Chancellor will be back with more tax increases...

We need to talk about debt. Global government debt is approaching 100% of global GDP. And the incoming Trump administration may be about to increase the large US fiscal deficit still further. Paul Diggle and Luke Bartholomew discuss whether the infamous bond vigilantes will return, pushing up government borrowing costs amid fears of debt sustainability.

A Trump presidency will have important implications for tax and spending, immigration, trade policy, and regulation. Paul Diggle and Luke Bartholomew are joined by James McCann and Lizzy Galbraith to discuss the likely tax cuts and spending measures that Trump may pursue, the prospect of a global trade war, and what all this means for monetary policy and financial markets. 

Labour’s first budget was a big one – new fiscal rules, large tax and spend increases, and a big rise in investment. Paul Diggle and Luke Bartholomew are joined by Lizzy Galbraith to break down the measures, and assess what they mean for the UK’s economic, political and market outlook.  

After months of piecemeal economic policy support, Chinese stimulus has stepped up significantly and equity markets have surged higher. Paul Diggle and Luke Bartholomew speak to Robert Gilhooly about the headwinds the Chinese economy has been facing, the risks of China slipping into ‘Japanification’, and whether recent measures represent a turning point in monetary and fiscal policy support.

Markets are facing an array of potential risks - from the imminent US election, narrow leadership in equity markets, and spiking tensions in the Middle East. Paul and Luke speak to Carl Hazeley from Finimize about how retail investors are navigating the economic and market landscape, and how financial institutions can support this increasingly sophisticated group of investors. 

Economies are built on infrastructure. But stretched public finances mean the state is increasingly looking to the private sector to help fund infrastructure. Climate change, technological progress, and geopolitics are changing the sort of infrastructure we need. And building physical infrastructure can be fraught with hurdles from the planning process. On this episode, Paul Diggle speaks with Bri...

UK Chancellor Rachel Reeves will deliver her first Budget on 30 October. Paul Diggle and Luke Bartholomew ask whether Labour have been talking the UK economy down as the government manages expectations ahead of potential tax increases, and whether markets should be concerned about possible accounting changes to the way Bank of England losses are treated in the public finances. 

A weak US jobs report reignited concerns about a US recession, and a surprisingly large Bank of Japan rate hike causes a rapid unwind of the yen carry trade. Together, these sent shockwaves through financial markets. Paul Diggle and Luke Bartholomew speak to James McCann and Sree Kochugovindan about whether “this time is different” for US recession indicators, what the resignation of Prime Ministe...