The Weekly Briefing from Capital Economics

Following Israeli strikes against Iranian nuclear and military targets, and Iranian counterstrikes, Group Chief Economist Neil Shearing lays out what investors should be watching for across macro and markets. Among other issues, Neil also explains:Why – as things stand – this situation shouldn’t influence the Fed meeting in the coming week;  What the latest inflation data signal about how tariffs are working their way through the global economy; Whether a 'shadow' Fed chairman would tackle Donald Trump's problems with the current incumbent What to make of the past week’s round of US-China talks in London.Also on the show, Commodities Economist Hamad Hussain talks about China’s stranglehold on global rare earths supply, how the demand picture will change in the wake of the latest US-China agreement and why Western governments haven’t done more to find alternatives to Chinese sellers. Events and analysis referenced in this episode:The Israel-Iran escalation and global marketsIsrael’s strikes on Iran: assessing the macro impactDrop-In: Israel-Iran military strikes – Assessing the global economic implicationsFiring Powell would just be the beginning of the Fed's endLimited US-China “deal” suggests ambitions are lowRare earths “deal” won’t be the final wordCapital Economics Events

Group Chief Economist Neil Shearing unpacks the latest data to assess the impact of Donald Trump’s tariffs, including signs that the effects of tariff front-running are now unwinding. He also discusses how businesses are navigating the ongoing uncertainty and why the Bank of England is trailing the ECB in cutting interest rates.Also on the show, Senior Economic Adviser Vicky Redwood explores what NATO’s proposed push to raise defence spending to 5% of GDP could mean for economic growth, and the fiscal constraints that may stand in the way. Analysis and events referenced in this episode:Read: A European defence revolution?Read: Will defence spending turbocharge economic growth?Drop-In: India Outlook – Can the economy and markets continue to outperform through 2025?Drop-In: How the UK’s economic backdrop is shaping its fiscal choicesCapital Economics Awards

After another week of twists and turns in the Trump trade policy roll-out, Stephen Brown from our US team and Jonas Goltermann from our Markets team are on the show to talk about what comes next. In their conversation with David Wilder they touch on:Where tariff rates are likely to end up, even as “reciprocal” tariffs work their way through the courts;How worried the bond market really is about the US fiscal picture;If the US economy is continuing to show resilience in the face of higher tariffs;Whether the post-Liberation day rally in equities has run its course.Also on the show, Justin Chaloner, our Head of Data Economics, explains what our data is showing about the impact of tariffs on global trade and highlights a new data tool that tracks how Chinese exporters are funnelling goods through lower-tariff economies.  Analysis and events referenced in this episodeRead: Revising back up our forecast for the S&P 500Read: Is US equity exceptionalism back for good?Capital Economics Data ExplorerRead: The implications of lower quality UK economic data

Donald Trump jolted markets on Friday with a threat to slap steep tariffs on the EU. Group Chief Economist Neil Shearing jumped back on the podcast to join David Wilder and unpack whether this is classic brinkmanship – or something more serious. In the original recording, Neil also discusses recent bond market moves following the House’s approval of Trump’s “big, beautiful” tax bill, and reflects on the enduring lessons from Liz Truss’s chaotic spell as UK Prime Minister.Also on the show:Paul Dales and Ruth Gregory dissect the UK macro outlook and what's gone wrong with the official data.Hamad Hussain from our Commodities team explains why structural forces are setting gold up for new record highs later this year.Analysis and events referenced in this podcastData: Tariff Impact Modelhttps://www.capitaleconomics.com/data-and-charts/tariff-impact-modelRead: Trump threat of 50% tariffshttps://www.capitaleconomics.com/publications/europe-rapid-response/trump-threat-50-tariffsData: Global Trade Stress Monitor https://www.capitaleconomics.com/publications/global-economics-update/global-trade-stress-monitorMarkets Drop-In: Europe’s outperformance vs the state of US exceptionalismhttps://www.capitaleconomics.com/events/markets-drop-europes-outperformance-vs-state-us-exceptionalismRead: Gold prices to take a breather before the next leg uphttps://www.capitaleconomics.com/publications/commodities-update/gold-prices-take-breather-next-legCommodities Drop-In: OPEC+ talks, gold’s pullback, metals and tariffs and morehttps://www.capitaleconomics.com/events/commodities-drop-opec-talks-golds-pullback-metals-and-tariffs-and-more

Things are looking up after the US and China de-escalated their trade war, but is the global economy off the hook? In the latest episode of The Weekly Briefing from Capital Economics, Group Chief Economist Neil Shearing tells David Wilder why the tariff situation is looking brighter, but also identifies the key flashpoints to watch in the coming weeks. John Higgins, our Chief Markets Economist, is also on the show to talk about the financial markets angle to this turnaround in global sentiment. He sees more upside for US equities, even after the notable gains of recent weeks, and isn’t convinced that investors have set themselves up for a fall. Plus, following the launch of our ‘Future of Europe’ series, Franziska Palmas discuss how Germany’s economic outlook is looking a bit more optimistic, but also why the bloc’s biggest economy will continue to struggle – and what that means for boosters of the idea of the EU becoming a third geo-economic pillar alongside the US and China. Analysis and events referenced in this episode:Global Trade Stress MonitorCapital Daily: US big tech is back … but not at China’s expenseCapital Daily: Back to the future?Capital Economics EventsData: Global Markets ForecastsThe Future of Europe

One deal down. Many, many more to go. Except there was less to that much-touted US-UK trade deal than either government is suggesting and far tougher US talks with China and the EU are still to come.In this week’s episode of The Weekly Briefing from Capital Economics, Group Chief Economist Neil Shearing and Head of China Economics Julian Evans-Pritchard unpack what was actually agreed between the US and UK, and look ahead to this weekend’s pivotal US-China negotiations in Switzerland.Julian discusses the outlook for China’s exports following their remarkable post-pandemic surge and considers what further stimulus measures might be on the cards. Neil assesses the broader state of global trade ahead of the looming expiration of Donald Trump’s 90-day reciprocal tariff pause.Neil also offers a preview of our major upcoming series on the future of Europe – an in-depth project that cuts through the recent optimism to deliver clear-headed analysis, robust data, and compelling presentations.Events and analysis referenced in this episodeThe Future of EuropeData: Tariff Impact ModelData: China Labour Market Indicator

If you’re looking for evidence of the negative hit from Donald Trump’s tariffs, you’ll struggle to find it in the hard data. Group Chief Economist Neil Shearing is on The Weekly Briefing from Capital Economics minutes after the release of the US employment report for April to talk about how economies have been holding up in the weeks since the ‘Liberation Day’ announcement. In his conversation with David Wilder, he addresses the key issues of the moment, including:What Q1 US GDP data and port data aren’t telling us about the negative hit to impact on economies from tariffs;Whether markets have become too complacent about the tariffs impact;How the tariffs threat will influence the Federal Reserve and Bank of England at their meetings in the coming week.Plus, ahead of a key OPEC+ meeting on Monday, David Oxley and Olivia Cross from our Commodities & Climate desk talk about what recent signals from Saudi officials could mean for already-weak oil prices. Events and analysis referenced in this episode:Global Drop-In: The Fed, Bank of England and ECB – Making sense of the latest rate decisionsData: Central Bank HubDrop-In: Which economies could gain if the US turns away from China?Read: Will Asia benefit from China's plunging US exports?Drop-In: The future of OPEC+, oil prices and the Gulf

Another rollercoaster week in Trumpland wound down with markets buoyant on reports of more White House softening in its approach to tariffs and China taking steps to ease restrictions on some US imports. But are things really looking up? And, if so, why hasn't the dollar bounced with equities?Group Chief Economist Neil Shearing and Jonas Goltermann, our Deputy Chief Markets Economist, are on The Weekly Briefing from Capital Economics to assess whether there has been a fundamental improvement in the outlook, or if this is a case of investors smoking too much “hopium”. In a wide ranging chat, they discuss:What the latest economic data suggest about the impact of higher tariffs;The chances that the US and China engage enough to get a deal done;Whether King Dollar could be overthrown – and the risks of a dollar crash. Events and analysis referenced in this episodeRecording: Is the dollar’s global dominance a casualty of tariff chaos?https://www.capitaleconomics.com/events/drop-dollars-global-dominance-casualty-tariff-chaosANZ Drop-In: Australia’s election, RBA easing and the economic outlookhttps://www.capitaleconomics.com/events/anz-drop-australias-election-rba-easing-and-economic-outlookDrop-In: 100 Days In – The economic impact of Trump’s second term so farhttps://www.capitaleconomics.com/events/drop-100-days-economic-impact-trumps-second-term-so-far

Neil Shearing has been in back-to-back meetings with global institutions who – like everyone – are trying to make sense of Trump’s chaotic trade policy roll-out, not least the recent decision to pause "reciprocal" tariffs for 90 days. The Group Chief Economist at Capital Economics joins the latest episode of The Weekly Briefing to address some of the questions that have kept coming up in those sit-downs with clients, including:What the global trading picture might look like when the 90-day tariffs “pause” endsWhy we think US growth risks have risen but we still don’t expect a recession How the Federal Reserve will play slower growth with higher inflationWhat curbs on Nvidia chips tells us about decision-making amid Trumpian uncertainty If there’s a US-China trade deal to be doneAnalysis referenced in this episode:Read: Will tariffs drive a flood of Chinese exports elsewhere?https://www.capitaleconomics.com/publications/global-economics-focus/will-tariffs-drive-flood-chinese-exports-elsewhereRead: Is China offloading its dollar assets?https://www.capitaleconomics.com/publications/china-economics-focus/china-offloading-its-dollar-assetsData: Tariff Impact Model (TIM)https://www.capitaleconomics.com/data-and-charts/tariff-impact-modelRead: US Outlook - Scaled-back tariffs not an existential threathttps://www.capitaleconomics.com/publications/us-economic-outlook/scaled-back-tariffs-not-existential-threatRead: ECB Policy Announcement (April 2025)https://www.capitaleconomics.com/publications/europe-rapid-response/ecb-policy-announcement-april-2025

As the dust settles after another of week of dramatic policy shifts, the picture that has emerged is a familiar one from Trump's first term: China is the main target after all. China isn't taking Trump's tariffs lying down. Instead, it has hit back tariff for tariff so that both sides are now applying tariffs to each others' goods of well above 100%. In this week's episode, Group Chief Economist Neil Shearing asks Mark Williams, our Chief Asia Economist, why China is adopting a more combative approach to Donald Trump than other countries and what that suggests about the future of the relationship. Chief Global Economist Jennifer McKeown offers some scenarios for what might happen next with tariffs and their impact on growth across the global economy. And the team cast their eyes further ahead to discuss whether the tumult of the last couple of weeks may end up accelerating the fracturing of the global economy into US and China-aligned blocs or instead drive more former US allies closer to China.  Events and analysis referenced in this podcast:Read: Mapping out trade war scenariosMapping out trade war scenarios | Capital EconomicsRead: China and US still in an escalatory loopChina and US still in an escalatory loop | Capital EconomicsMeet: TIM - the Capital Economics Tariff Impact Model Tariff Impact Model | Capital EconomicsWatch: The escalating trade war and its economic and market effectsDrop-In: The escalating trade war and its economic and market effects | Capital Economics