On Global Markets

Defense spending is on the rise globally. As the IMF noted in April: ..over 2020–24, 50 percent of countries worldwide increased their defense spending budgets and, as of 2024, almost 40 percent allocated more than 2 percent of GDP to defense spending, compared with 27 percent in 2018.  According to the Stockholm International Peace Research […] 

Over the last couple of weeks, AI risk seems to have gone mainstream. Social media was set abuzz when some current and former Anthropic employees noted that they genuinely believed that there was a real risk of an AI disaster wiping out the human race. That led, understandably enough, to all sorts of coverage across […] 

This week the Fed hiked rates. This was hardly unexpected given that inflation remains above target, that growth looks solid, and that continuing inflationary pressures are very apparent. In such circumstances, a hold – whatever the President might desire – would have been much more noteworthy. 75% of respondents to the latest FTxBooth US Macroeconomists […] 

Possibly the single best purchase your British-based columnist has ever made was buying a portable air conditioning unit around three years and a half ago. It was not cheap to buy, nor is it cheap to run, and it generally spends most of the year in a cupboard. It was acquired in the winter of […] 

On one level the much-anticipated speech of Fed Chairman Kevin Warsh at the Jackson Hole conference was not especially surprising. The key message, after all, was that with inflation remaining elevated, ‘we have work to do’. To investors, that sounded like an acknowledgement that interest rates would likely be heading up. And, given that inflation […] 

Voters, as they have made clear over the last few years, hate inflation. And to most of the general public, it appears that ‘inflation’ does not just mean the pace of year on year prices rises but something about the level of prices. People would generally, and understandably, like things to be cheaper – especially […] 

One consequence of the more tumultuous geopolitical environment of the 2020s has been a material rise in global defense spending, and one that looks set to continue. As the IMF noted in its World Economic Outlook this April: After decades of declining global defense spending, rising geopolitical risks and more frequent military conflicts are pushing […] 

There is a well-rehearsed choreography to Yen interventions. It usually starts with ‘sources close to the Ministry of Finance’ letting it be known that they are unhappy with the current level of the Yen, or at least displeased, with the sharpness of recent moves. That is sometimes enough to persuade investors to back away. If […] 

A couple of weeks ago, this column reported on a Finance Experts Panel poll on the Fed’s new communications strategy. Or, as it might be termed, anti-communications strategy. Kevin Warsh, the new Chair, has taken a radically different approach to his most recent three predecessors. As that column explained, ‘he worries that forward guidance means […] 

The Fed has a larger balance sheet than was once the case. Dramatically so, as the chart below makes clear. This is a result of a series of policy decisions made over the last two decades; namely three rounds of quantitative easing (QE) carried out between 2008 and 2014; and then an additional period of […]