The Weekly Briefing from Capital Economics

Donald Trump unsurprisingly dominated the news cycle in his first week back in office. To make sense of some of what the president has pledged, threatened and suggested so far, Group Chief Economist Neil Shearing was on The Weekly Briefing from Capital Economics to discuss what we know about tariffs, how global central banks are meant to navigate this more uncertain new environment and whether the Fed is in for a particularly contentious relationship with the White House. Plus, the new president has already made a big splash in oil markets, including an Inauguration Day pledge to “drill baby, drill” and a call for Saudi Arabia to lower prices. David Oxley, Kieran Tompkins, Olivia Cross and Hamad Hussain from our Commodities and Climate team address the issues that Trump has raised around oil and explain why downside risks to prices have just grown. Analysis and events referenced in this episode:Central Bank Hubhttps://www.capitaleconomics.com/data-and-charts/central-bank-hubRead: Strong dollar is a problem for tomorrowhttps://www.capitaleconomics.com/publications/global-economics-focus/strong-dollar-problem-tomorrowEvent: Fed, ECB and BoE – Unpacking the first rate decisions of 2025https://www.capitaleconomics.com/events/drop-fed-ecb-and-boe-unpacking-first-rate-decisions-2025Read: What to make of Trump’s National Energy Emergency?https://www.capitaleconomics.com/publications/commodities-focus/what-make-trumps-national-energy-emergencyRead: How low could oil prices go if Saudi open the oil taps?https://www.capitaleconomics.com/publications/commodities-update/how-low-could-oil-prices-go-if-saudi-open-oil-taps

Group Chief Economist Neil Shearing calls in from Singapore to The Weekly Briefing from Capital Economics to talk about what’s known and unknown about Donald Trump’s policy agenda just days before he is sworn in again. He discusses the tone set by Trump's first inaugural address, what we've learned from recent confirmation hearings and the inflation impact of a gradual rise in tariffs. Neil also talks about why our China Activity Proxy is telling a different story from official Chinese GDP data and explains why the UK has so much potential in the AI revolution.Also on the show, fresh from his team being named most accurate forecaster of major global stock indices by LSEG Data & Analytics for a second straight year, Chief Markets Economist John Higgins talks about why we expect 2025 to be another strong year for US equities. Analysis and events referenced in this episode:CAP: Weaker fiscal support behind growth slowdownhttps://www.capitaleconomics.com/publications/china-activity-monitor/cap-weaker-fiscal-support-behind-growth-slowdownUS continues to lead the way on our AI indexhttps://www.capitaleconomics.com/publications/global-economics-update/us-continues-lead-way-our-ai-indexUS Drop-In: Inauguration Day special – Knowns and unknowns around Trump’s second termhttps://www.capitaleconomics.com/events/us-drop-inauguration-day-special-knowns-and-unknowns-around-trumps-second-termWhy we expect the S&P 500 to thrive in 2025https://www.capitaleconomics.com/publications/equities-focus/why-we-expect-sp-500-thrive-2025

A grim week for bonds was capped by a stunningly hot US jobs report. Group Chief Economist Neil Shearing and Deputy Chief Markets Economist Jonas Goltermann joined the first episode of The Weekly Briefing from Capital Economics of the year to explain what these jobs numbers signal about the health of the US economy and how the Fed could respond. They also discuss the fall-out in global bond markets, including why gilts have been under particular pressure despite the Labour government’s efforts to prove its fiscal bona fides with the investors.  Analysis and events referenced in this episode:UK Weekly: Gilt market is not in crisis, but it does cause problemshttps://www.capitaleconomics.com/publications/uk-economics-weekly/gilt-market-not-crisis-it-does-cause-problemsChina Weekly: More weakness in store for the renminbihttps://www.capitaleconomics.com/publications/china-economics-weekly/china-weekly-more-weakness-store-renminbiCapital Economics eventshttps://www.capitaleconomics.com/events

The final Weekly Briefing from Capital Economics of the year has Group Chief Economist Neil Shearing making sense of that December Federal Reserve meeting and explaining what the latest PCE data say about the inflation outlook and where rates are heading in 2025. He also addresses why hopes for a sweeping ‘Mar-a-Lago accord’ (or 'Plaza Accord 2.0') that would tackle US-China currency imbalances are likely to be disappointed. Plus, a dramatic plunge in the value of Brazil’s real shows how far investors have fallen out with Lula’s spendthrift administration. In an exclusive clip from our client briefing on Brazil’s crisis, William Jackson, Jason Tuvey and Jonas Goltermann discuss the real’s fair value, the effectiveness of FX intervention and what the government needs to do to get investors back onside. Events and analysis referenced in this episode:The Fracturing of the Global Economyhttps://www.capitaleconomics.com/key-issues/fracturing-global-economyData: Bank of England Caseometerhttps://www.capitaleconomics.com/data-and-charts/bank-england-caseometerEM Drop-In: Brazil’s currency crisis – Economic and market implicationshttps://www.capitaleconomics.com/events/em-drop-brazils-currency-crisis-economic-and-market-implicationsData: EM Financial Risk Indicatorshttps://www.capitaleconomics.com/data-and-charts/em-financial-risk-indicators

In the latest episode of The Weekly Briefing from Capital Economics, Group Chief Economist Neil Shearing outlines the three big policy quandaries facing three big DM central banks. He unpacks the ECB’s December decision, previews the upcoming Fed and Bank of England meetings and talks about which of these institutions faces the greatest risks in 2025.Neil also talks about whether China’s policy pivot will translate into meaningful efforts to support and rebalance the economy, discusses what events in Syria say about geopolitics and the macro narrative and highlights a key risk for the coming year. Plus, following our dive into the big macro themes for 2025, Chief Markets Economist John Higgins is on the show to talk about the financial markets outlook – including why we think a bubble in US equities will keep inflating over the coming year. Analysis and events referenced in this episode:Drop-In: The Fed, ECB and BoE December meetings and the 2025 policy outlookhttps://www.capitaleconomics.com/events/drop-fed-ecb-and-boe-december-meetings-and-2025-policy-outlookLatest quarterly Outlookshttps://www.capitaleconomics.com/outlooksWeek-ahead Forecastshttps://www.capitaleconomics.com/data-and-charts/week-ahead-forecasts

This is a special episode of The Weekly Briefing from Capital Economics all about the themes that will shape the global economy in 2025. Group Chief Economist Neil Shearing and Chief Global Economist Jennifer McKeown stepped out of our client event in London on 4th December to talk to David Wilder about the 2025 growth story. They discussed how Donald Trump’s policy pledges will – and won’t – affect US and global macro variables in the coming year, whether creaking public debt profiles will stir up the bond vigilantes, the limits of geopolitics as a driver of the macro story and more. Analysis and events referenced in this episode:Five for 25: The macro themes that will shape next yearhttps://www.capitaleconomics.com/blog/five-25-macro-themes-will-shape-next-yearDrop-In: The World in 2025 – The global macro and market outlookhttps://www.capitaleconomics.com/events/drop-world-2025-global-macro-and-market-outlook

It was déjà vu all over again this week after a social media post from Donald Trump rattled markets. Group Chief Economist Neil Shearing is on the latest episode of The Weekly Briefing from Capital Economics to discuss how seriously we should treat the president-elect’s online threat to impose sweeping tariffs on Canada, Mexico and China. He also talks about whether moves in the bond market suggest that China is turning Japanese and warns of a distorted November US payrolls report.Plus, a lot of time is spent analysing which economies are going to lose out when Trump returns to the White House, but what about the potential winners? Deputy Chief EM Economist Shilan Shah explains how Indian manufacturing could get a boost in an intensified global trade war. Analysis and events referenced in this episode:Event: The World in 2025https://www.capitaleconomics.com/world-2025-event-december-2024How to think about tariffshttps://www.capitaleconomics.com/publications/global-economics-focus/how-think-about-tariffsGlobal Drop-In: US tariffs – How they’ll work, what they’ll do and how the world will respondhttps://www.capitaleconomics.com/events/global-drop-us-tariffs-how-theyll-work-what-theyll-do-and-how-world-will-respondData: China Activity Proxyhttps://www.capitaleconomics.com/data-and-charts/china-activity-proxyIs a bubble in India’s stock market deflating?https://www.capitaleconomics.com/publications/equities-focus/bubble-indias-stock-market-deflating

This special episode of The Weekly Briefing from Capital Economics is an exclusive extract from our online Drop-In briefing following Donald Trump’s threat to impose massive tariffs on Mexico, Canada and China. Was this a negotiating ploy from the president-elect? Who’ll pay the cost of higher tariffs? How would targeted countries respond? Group Chief Economist Neil Shearing, Vicky Redwood, our Senior Economic Adviser, and Chief Europe Economist Andrew Kenningham answered these questions and more in our day-after briefing.Analysis and events referenced in this episode: How to think about tariffshttps://www.capitaleconomics.com/publications/global-economics-focus/how-think-about-tariffsCanada, China and Mexico in Trump’s firing line​https://www.capitaleconomics.com/publications/global-economics-update/canada-china-and-mexico-trumps-firing-lineDrop-In: US tariffs – How they’ll work, what they’ll do and how the world will respond https://www.capitaleconomics.com/events/global-drop-us-tariffs-how-theyll-work-what-theyll-do-and-how-world-will-respond

Discussion on the latest episode of The Weekly Briefing from Capital Economics attempts to avoid any mention of Donald Trump – and fails almost immediately. But Group Chief Economist Neil Shearing’s point is that there is a lot going on in the world besides regime change in Washington. He talks to David Wilder about why inflation is worrying markets, why Chinese stimulus hopes were dashed, and what Nvidia’s earnings say about AI’s potential. Plus, despite escalation in the war in Ukraine, speculation is also building about an end to fighting when Donald Trump takes office next year. Senior EM Economist Liam Peach talks about what this could look like and its potential implications for the Ukrainian, Russian and broader European economies. Events and analysis referenced in this episode:London Event: The World in 2025https://www.capitaleconomics.com/world-2025-event-december-2024Is Nvidia a sign that the AI boost for US equities is over?https://www.capitaleconomics.com/publications/capital-daily/nvidia-sign-ai-boost-us-equities-overTrump and the war in Ukrainehttps://www.capitaleconomics.com/publications/emerging-europe-economics-update/trump-and-war-ukraineDrop-In: Trump, OPEC, China – What’s driving oil prices in 2025?https://www.capitaleconomics.com/events/drop-trump-opec-china-whats-driving-oil-prices-2025

Group Chief Economist Neil Shearing hops off the plane from New York and hops onto the latest episode of The Weekly Briefing from Capital Economics to explain what Donald Trump’s cabinet nominations signal about the macro policy outlook, how Europe and China could respond to tariffs and the economic implications of removing millions of migrant workers from the US economy.Plus, as the initial, post-election euphoria in US financial markets – dubbed the 'Trump bump' – wears off, Deputy Chief Markets Economist Jonas Goltermann discusses what lies ahead for equities, bonds and currencies. Analysis referenced in this episode:Key Issue: Trump's second termhttps://www.capitaleconomics.com/key-issues/trumps-second-termVideo presentation: Trump's second term – Implications for the US economyhttps://www.capitaleconomics.com/events/video-presentation-trumps-second-term-implications-us-economyNew market forecasts ahead of a new Trump presidencyhttps://www.capitaleconomics.com/publications/global-markets-update/new-market-forecasts-ahead-new-trump-presidencyRevising our currency forecasts to account for Trumphttps://www.capitaleconomics.com/publications/fx-markets-update/revising-our-currency-forecasts-account-trumpData: Global Market Forecastshttps://www.capitaleconomics.com/data-and-charts/global-markets-forecasts