The Weekly Briefing from Capital Economics

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

Neil Shearing, Group Chief Economist at Capital Economics, discusses China's staggering $1.2 trillion trade surplus and its implications for global economies. He highlights how China's policies squeeze European exporters and impact emerging markets differently. Leah Fahy, a China Economist, explores the AI race, contrasting China's strategies and challenges against those of the US. Her insights reveal how China's push for self-sufficiency in AI is influenced by chip shortages and energy expansion, changing global tech dynamics and geopolitical stakes.

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.

Neil Shearing, Group Chief Economist at Capital Economics, joins Jennifer McKeown, Chief Global Economist, to explore predictions for 2026. They discuss how AI will primarily boost U.S. GDP, projecting a 2.5% growth fueled by technology investments. The duo highlights potential risks, such as the impact of a possible AI equity bubble burst and fiscal fragility in advanced economies. They also examine tensions in U.S.-China trade relations and the potential policy shifts in Europe, painting a complex picture of the global economic landscape.

Join Andrew Kenningham, Chief Europe Economist, Neil Shearing, Group Chief Economist, and William Jackson, Chief EM Economist, as they dissect Europe’s economic landscape. They discuss the fading optimism in Europe, slow fiscal stimulus, and Germany's cautious approach to debt. The trio explores Europe's competitiveness against the US and China, highlighting weak innovation and protectionist measures. With concerns over fiscal risks in Italy and France, they ponder Europe's military-industrial challenges amid rising geopolitical tensions.

Paul Dales, Chief UK Economist, shares insights on the UK Budget's mixed reception, discussing the limited growth strategy and the potential role of AI in boosting productivity. Ruth Gregory, Deputy Chief UK Economist, highlights the looming political risks that might impact fiscal credibility and gilt markets. Meanwhile, Leah Fahy, China Economist, tackles the decline in fixed-asset investment, suggesting it's more about successful policy than just economic downturns, backed by alternative activity measures showing resilience in industrial performance.