The Weekly Briefing from Capital Economics

There’s plenty of talk about a possible settlement in US-China relations, but Group Chief Economist Neil Shearing urges caution. Ahead of a call between Donald Trump and Xi Jinping, he spoke with David Wilder about how a deal might be struck – and why it would fall short of easing the deeper tensions driving the fracturing of the global economy.Also on the show, with crime rising in Latin American countries once seen as relatively safe, Chief Emerging Markets Economist William Jackson discusses its economic costs and influence on upcoming elections.Plus, in an exclusive clip from our central bank Drop-In briefing, we look at how the Fed’s latest rate projections compare with ours, and why the Bank of England is growing more sensitive to inflation risks.Analysis and events referenced in this episode:Event: Fracturing in the Age of Trump - New York October 2025Read: China's Nvidia ban signals strong push for chip self-sufficiencyRead: Counting the cost of crime in Latin AmericaLatAm Outlook: Slowdown sets the stage for dovish surprisesWatch: Central Bank Drop-In - Unpacking the Fed, ECB and Bank of England September meetings

The Fed meets this coming week to decide how much monetary relief the US economy really needs. Group Chief Economist Neil Shearing says that, employment data aside, the evidence argues for fewer rate cuts than markets are pricing in. He talks to David Wilder about the health of the economy, whether the surge in AI investment is making a difference, and previews the Bank of England meeting, where the pace of quantitative tightening may be slowed by a still-febrile bond market. Also on the show, Chief Climate and Commodities Economist David Oxley assesses the oil price outlook in light of the week's geopolitical developments in Qatar and Poland, and ahead of OPEC’s 65th anniversary.Analysis and events referenced in this episodeUS economy is doing better than weak payrolls suggestNo more BoE cuts this year, but rates to fall to 3.00% next yearLabour market slump to prompt BoC to resume cutsWeak labour demand forces Fed off the sidelinesThe economic and market impact of AIData: GDP NowcastsOPEC at 65: shifting market dynamics expose frailties

Group Chief Economist Neil Shearing tackles that weak US August Employment report, previews the coming week’s inflation data, talks about what’s been happening in the bond market and explains just what recent get-togethers in China signal about a new world order.Also on the show, ahead of a crunch vote for France’s government, Chief Europe Economist Andrew Kenningham talks about why the French political establishment is struggling to break out of its fiscal logjam, and what this all means for the outlook for the government bond market. Analysis and events referenced in this episode:Read: French borrowing costs may soon exceed Italy’sDrop-In: France’s political turmoil and the fragility of global bond marketsDrop-In: What’s really holding up the commercial real estate recovery?Fracturing in the Age of Trump - London September 2025Fracturing in the Age of Trump - New York October 2025

What tensions will yet erupt as the US–China economic relationship unravels? What will the global economy look like in 2040? And what should business and government leaders be doing now to adapt to an era of economic fracturing?The Fractured Age: How the Return of Geopolitics Will Splinter the Global Economy is published on 28 August. In this special episode, author and Group Chief Economist Neil Shearing joins David Wilder to unpack the book’s key lessons and to show how today’s headlines reveal the deeper forces driving economic fracturing. Explore Capital Economics' data and analysis on global economic fracturing and sign up for our fracturing events this September/October:Singapore (3rd Sept)Hong Kong (4th Sept)London (17th Sept)New York (9th Oct)

China’s government is making louder noises about boosting consumption, a shift that’s critical not just for rebalancing its investment-heavy economy, but also for easing global imbalances. But are these signals part of a real policy pivot? China Economist Leah Fahy talks to David Wilder about the latest in China’s rebalancing story and what it means for the trajectory of its economic growth. Also in this episode: July’s US jobs report was a shock, but it’s part of a wider slowdown across advanced economies. Chief Global Economist Jennifer McKeown explains what’s driving the weakness and how it could shape central bank decisions ahead.Events and analysis referenced in this episode:Read: Chinese overcapacity is a disinflationary gift and a geopolitical threatRead: Millions in China are about to see their take-home pay fallRead: Consumer loan subsidies are a step in the right directionRead: Labour markets weakening in most DMs, not just USData: US Labour MarketData: UK Labour Market IndicatorsKey Issue: The economic and market impact of AIFed Chair Powell at Jackson Hole (Aug 2025)

Group Chief Economist Neil Shearing tackles the week’s biggest macro and market questions, including: what could Beijing do after more weak China data? Why tariffs aren’t showing up more in the US economy? How much have the latest inflation reports shifted the Fed’s rate-cut debate – and should the Treasury Secretary be taking shots at central banks?Also: Chief Markets Economist John Higgins on why we’ve lifted our S&P 500 forecasts, the limits of valuation metrics, and the risks markets face from an unpredictable – and increasingly emboldened – president.Plus: In a clip from our online Drop-In client briefing, Shilan Shah on what’s gone wrong in India-US relations and how 50% tariffs could hit India’s economy.Analysis and events referenced in this episode:CAP: Growth slows in Q2 despite resilient industryIn-person events: Fracturing in the age of TrumpS&P 500: onwards and upwards for this year and nextDrop-In: India in Trump’s firing line – What’s at stake for the economy and markets

After an extraordinarily divisive Bank of England policy meeting, Group Chief Economist Neil Shearing explores why it’s become so difficult to get a clear read on the UK economy. Part of the problem lies with the data – an issue now making headlines in the US following Donald Trump’s dismissal of the Bureau of Labor Statistics commissioner. Neil explains what this means for the credibility of official data and what to watch for in the upcoming BLS inflation release, which could prove pivotal for the Fed’s September decision. Plus, Thomas Ryan from our US team looks at why Trump’s promises to restore American manufacturing are likely to fall far short of reality.Analysis and events referenced in this episode:Read: Miran a good pick for the FedRead: Integrity of economic data safe for nowUS Drop-In: Are higher tariff rates fuelling inflation – and how should the Fed respond?Data: UK Employment IndicatorRead: Tariffs will not fix decades-long manufacturing decline

Does July's grim US jobs report vindicate the Fed's dissenters who pushed for rate cuts this week? Deputy Chief North America Economist Stephen Brown and Deputy Chief Markets Economist Jonas Goltermann unpack what the latest data reveal about the health of the US economy, the Fed’s strategy and how markets are reacting. Plus, with AI's global rollout pointing to formidable energy demands, Climate and Commodities Economist Olivia Cross explains where the supply will come from.Analysis and events referenced in this episode:Read: Tariff impact on inflation slowly buildingData: Tariff Impact ModelData: China-US Rerouting dashboardRead: How the AI race will reshape global energy marketsKey Issue: The economic and market impact of AI

Donald Trump and his trade war are symptoms, not causes, of a deeper shift in the global economic order. The world has fractured into rival blocs, with the US and China emerging as the poles of competing systems, vying for resources, technological dominance and geopolitical influence. Now, with Trump back in office, long-held assumptions about American leadership are once again in question. What does his return mean for the trajectory of this fracturing, and how has the balance of risks evolved?In this special edition of The Weekly Briefing from Capital Economics, Group Chief Economist Neil Shearing and Chief Asia Economist Mark Williams explore the fracturing of the global economy. Ahead of the publication of fresh analysis about how fracturing has developed since Trump's return, they talk to David Wilder about how this process began long before the president was elected in 2016,  how it’s accelerating under his second term and where it might lead. Topics covered in this 30-minute episode include:The inevitability of US–China economic rivalry – and the scope for détenteHow fracturing is fuelling a global tech arms raceWhether Trump’s unilateralism could further strain or even break Western alliances.Events and analysis referenced in this episode:Fracturing under Trump – Register now:Singapore, 3rd SeptemberHong Kong, 4th SeptemberLondon, 17th SeptemberNew York, 9th OctoberRead: The fracturing of the global economyRead: The US, China and the Fractured Age

Group Chief Economist Neil Shearing sifts through a deluge of DM inflation data to highlight where tariff effects are coming through, where price pressures look too hot and which central banks are best positioned to press on with policy easing. He also talks to David Wilder about what China’s manufacturing overdrive is doing to the global inflation picture.Also on the show, how serious is Donald Trump about forcing out Jerome Powell? Deputy Chief North America Economist Stephen Brown talks about the market response to the latest attacks on the Fed chief, why forcing him out could prove counterproductive for a president wanting cheaper borrowing costs, and what to watch as the White House steps up the pressure. Events and analysis referenced in this episode:ECB Watch: A pause, or an end, to the easing cycleGlobal Drop-In: Fed, ECB and Bank of England – Unpacking the latest rate movesDrop-In: Could South Africa be about to see a big bond rally?Read: What happens if Trump fires Powell?