Macro Hive Conversations With Bilal Hafeez Ep. 320: Dominique Dwor-Frecaut on Weak US Growth, Fed Independence and AI Impact
Aug 7, 2025
Dominique Dwor-Frecaut, Chief US economist and macro strategist, shares insights drawn from her extensive background with hedge funds and institutions like the New York Fed and IMF. She discusses labor's declining share of income and the nuances of economic stagnation, emphasizing how pro-business forces are challenging antitrust measures. The conversation also highlights the double-edged sword of reduced immigration affecting supply and demand, alongside the growing influence of AI on economic landscapes.
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Trump's Unfulfilled Labor Share Reversal
- Trump initially aimed to reverse the decline in labor's income share by strengthening competition and workers' rights.
- However, pro-business forces prevailed, leading to weaker antitrust enforcement and maintaining economic asymmetries.
Drivers Behind 2024 US Growth Slowdown
- US growth slowed in early 2024 due to declining immigration and policy uncertainty, including unpredictable tariffs.
- Previous consumption booms driven by government transfers have faded, adding to the slowdown.
Labor Market Weakness Lags Unemployment Rise
- Weak payrolls coincide with lower labor supply from reduced immigration, balancing out labor demand.
- Labor market weakening is expected soon, but economic changes lag market reactions.