The Weekly Briefing from Capital Economics

Donald Trump says ‘tariff’ is “the most beautiful word in the dictionary”. That’s up for debate – but what’s less arguable is that raising taxes on imports as much as the Republican presidential candidate is threatening would be bad trade policy, according to Group Chief Economist Neil Shearing. He’s on the latest episode of The Weekly Briefing from Capital Economics to discuss why tariffs would hurt the US economy and the economies of its key trading partners, all while failing to achieve Trump’s objectives. Also on the show, Hamad Hussein from our Climate and Commodities team explains why reports of cooling electric vehicles sales in the US and Europe paint an incomplete demand picture, and what that all means for oil appetite.Plus, an exclusive extract from our post-ECB client briefing on the Governing Council’s next steps – including whether its last move of the year could be a super-sized rate cut. Analysis and events referenced in this podcast:Read: How Trump could erode the US economic advantage in a fractured worldKey Issue: US Election 2024Read: Why we expect the S&P 500 to soar in 2024Watch: What will follow another ECB rate cut?Read: Taking stock of the two-speed electric vehicle rolloutData: Long-term Energy Scenario Generator

It’s a rare thing for a press conference from China’s Minister of Finance to excite quite so much, but there were widespread hopes in markets that Saturday’s briefing from Lan Fo’an would finally provide the details of fiscal easing plans that had been missing from the government’s stimulus pledges so far. Did Minister Lan deliver? Group Chief Economist Neil Shearing gives his assessment on the latest episode of The Weekly Briefing from Capital Economics and discusses what the leadership needs to deliver to boost confidence in its steering of the economy. Neil also talks about the latest flow of US data and what that signals about what the Fed will do in November and previews the coming week’s ECB policy meeting. Also on the show, Deputy Chief EM Economist Shilan Shah and Assistant Economist Joe Maher talk about India’s economic rise and whether it will trigger a massive and broad surge in commodities prices, as China did previously. Research and events referenced in this episode:MOF promises more spending but scale still unclearAsia Drop-In: How far will policy easing go to support Asia’s economies?Europe Drop-In: What will follow another ECB rate cut?Will India kickstart the next commodity boom?RBI on course for December rate cut

Is the US facing a hard landing, a soft landing or no landing? Have stimulus announcements fundamentally changed the China equities story? How should investors trade risks around the US election?Raymond James CIO Larry Adam joins Group Chief Economist Neil Shearing on the latest episode of The Weekly Briefing from Capital Economics. They talk to David Wilder about the big issues in global macro and markets in a wide-ranging chat that takes in:How quickly the Fed will unwind its restrictive policy and where it will stop cutting rates;What's holding European equities back from outperforming the US; Why escalating conflict in the Middle East hasn't had a big impact on markets so far, and what could change that.Further readingRaymond James Letter from the CIO: The Great American Road Triphttps://www.raymondjames.com/trimaranadvisors/resources/2024/10/01/the-great-american-road-tripCE Group Chief Economist Note: How Trump could erode the US economic advantage in a fractured worldhttps://www.capitaleconomics.com/blog/how-trump-could-erode-us-economic-advantage-fractured-worldCE: US Macro Scenarios dashboardhttps://www.capitaleconomics.com/data-and-charts/scenariosCE: China stimulus - Your questions answeredhttps://www.capitaleconomics.com/publications/china-economics-update/china-stimulus-your-questions-answeredCE: Latest thoughts on r* and where rates end this cyclehttps://www.capitaleconomics.com/publications/global-economics-update/latest-thoughts-r-and-where-rates-end-cycleAbout Larry AdamLarry Adam joined Raymond James in 2018 as the chief investment officer for Private Client Group. Prior to joining Raymond James, Larry, as a managing director, held the dual roles of CIO of the Americas and global chief investment strategist for Deutsche Bank private wealth management. He sat on the U.S. investment committee, the management team responsible for investment strategy and asset allocation for U.S. discretionary client portfolios. He was also a member of Deutsche Bank’s global investment committee that formalizes and establishes the global house view. Prior to being named Deutsche Bank’s global chief investment strategist, Larry was the head of the asset allocation and quantitative analysis group, the group responsible for analyzing and implementing client-specific asset allocation strategies. He joined Deutsche Bank in 1992.Larry received a B.B.A. with a concentration in finance from Loyola University Maryland in 1991 and received a master’s degree in business with a concentration in finance from Loyola University Maryland in 1993. He received the Chartered Financial Analyst designation in 1996, the Certified Investment Management AnalystSM certification in 2001 and the Certified Financial Planner® designation in 2004. Larry has been featured prominently on CNBC and Bloomberg and is frequently quoted in well-known publications such as the Wall Street Journal, Barron’s and the International Herald Tribune.About Neil Shearing Neil Shearing is Group Chief Economist at Capital Economics. He has overall responsibility for managing our team of economists and leading our research, as well as developing the firm’s products and its relationship with clients. He is also a director of the company. Neil is the first point of contact for many clients and presents regularly on the global economic and financial market outlook. He is a well-known voice within the investment community and has written articles in the Financial Times and a number of other newspapers, as well as appearing regularly on TV and radio.Prior to becoming Group Chief Economist, Neil was Chief Emerging Markets Economist, managing a team that won several awards for forecast accuracy. He also managed our New York office. Neil joined Capital Economics from HM Treasury where he worked as an Economic Adviser in various areas, including fiscal policy and global economics. He holds degrees in Economics from the University of York and the University of London and is a Fellow of the Royal Society of Arts. 

In the wake of Iran’s missile strike on Israel on Tuesday, Deputy Chief EM Economist Jason Tuvey and David Oxley, our Chief Commodities and Climate Economist, talk about implications for the global oil market, including: What an Israeli retaliation against Iranian oil production could mean for prices;The risks around Iran closing the Strait of Hormuz;How far prices would need to rise to threaten the global inflation picture.Further readingOil spikes, but not yet a concern for central banksNasrallah and the next phase of war in the Middle East

China’s leadership finally took action this week to staunch the economy’s bleeding with a flurry of stimulus announcements and pledges to do more. But will it be enough? Group Chief Economist Neil Shearing talks to David Wilder about whether the outlook for the Chinese economy has fundamentally shifted as a result of a news-packed few days. He also talks about what the latest European inflation data suggests about how the ECB will play its October meeting and marks the second anniversary of the Liz Truss “mini budget” debacle.Also in this episode, Thomas Ryan, our US housing lead, talks to US Economist Olivia Cross about how the market is finally shifting away from sellers, differences with what's happening in Canada and what Kamala Harris’ plans to improve affordability would mean for the US outlook.Analysis and events referenced in this episode:China: ​​​​​​​New fiscal package being lined upChina property construction correction has barely begunGermany will be stuck in the slow laneGlobal Drop-In: Are the US and Europe at risk of recession?Key Issue: What to expect on Budget dayUS Housing: Sellers lose grip on the market

After the long-awaited start to the Federal Reserve’s easing cycle, Group Chief Economist Neil Shearing discusses next steps. He answers client questions about the risks of inflation bouncing back and explains why we expect rates to settle at levels much higher than before the pandemic.Also, on the show, Lily Millard and Shilan Shah from our emerging markets team discuss how EM central banks are likely to respond as US rates start falling.Analysis and events referenced in this episode:Report: Global imbalances will continue to fuel fracturingKey Issue: R* and the end of the ultra-low rates eraReport: China's slowdown still has a lot further to runDrop-In: Europe Economic Outlook – Germany’s return to stagnationProperty Drop-In: The size and shape of Europe’s commercial real estate recoveryData: EM Financial Risk IndicatorsReport: What the Fed’s easing cycle means for EMs

Reports of retail’s death have been exaggerated. After a long and painful adjustment, the retail’s potential to deliver decent returns means our commercial real estate team now thinks it’ll be the second best performer among the major sectors over our forecast horizon in both the US and UK. CRE Chief Economist Kiran Raichura and Matt Pointon, our UK CRE lead, are on this special property-themed episode of The Weekly Briefing to talk to David Wilder about our forecasts and address some of the big issues around retail’s recovery, including:How this recovery will compare to the sector’s performance in the early 2000s;What Macy’s store closures announcement suggests about the performance of shopping malls;What a slowing US economy could mean for retail returns;How the UK’s retail sector stacks up;What proposals to pedestrianise London’s Oxford Street suggests about the UK outlook.Analysis referenced in this episode:US: Time to go shopping for retail assetsUK: Retail investment will continue to lead the recoveryUK Q4 Outlook: Look to beds, sheds and retail for best returns

As the much-anticipated start of Fed easing approaches, the debate has centred on whether Powell & Co. will opt for a 25 or a 50-basis point rate cut. On the latest episode of The Weekly Briefing from Capital Economics, Group Chief Economist Neil Shearing discusses the rationale for a larger move, but also explains why we’re expecting this easing cycle to begin with a 25bps move. Senior Markets Economist James Reilly is also on the show to talk about our new interactive dashboard which crunches more than six decades of Fed and market data to give investors a clear guide to how major asset prices will respond to monetary easing. Finally, Simon MacAdam, our Deputy Chief Global Economist, discusses our Economic Momentum Indicators, which give investors single, comparable data points showing whether DM economies are facing recession.  He tells Senior Global Economist Ariane Curtis what the indicators are saying about the growth risks faced by the US and Germany.Analysis and Data Dashboards referenced in this episode:Report: Rate cuts and asset returnsDashboard: Rate Cuts & Asset ReturnsReport: How to gauge recession risk in DMsDashboard: Composite Economic Momentum Indicators

That August payrolls report was one of the more keenly awaited data releases in a while – but what do its details suggest about how the Fed is likely to start monetary easing when it meets later this month?  On the latest episode of The Weekly Briefing from Capital Economics, Chief North America Economist Paul Ashworth and Group Chief Economist Neil Shearing talk recession risks, the Fed and ECB meetings, manufacturing’s struggles and more.Analysis and events referenced in this episode:US August Employment Report ECB will keep to steady 25bp cuts US Scenarios Dashboard Capital Economics online and in-person events

August’s US employment report release on Friday will be the coming week’s must-watch market event. On the latest episode of The Weekly Briefing from Capital Economics, Group Chief Economist Neil Shearing talks about what we’re expecting and how the outcome could influence the anticipated start of Fed easing this month. Neil also discusses China’s confusing policy signals and, ahead of client briefings this week, highlights some of the key risks that the economist team is watching between now and year-end.Also on the show, Zichun Huang from our China team explains what Beijing needs to do to resolve the property market’s giant inventory of unsold apartments – but also why resolution won’t dramatically alter the Chinese economic outlook. Analysis and events referenced in this episode:US August payrolls previewGlobal Drop-In: Towards 2025 – Risks to the global economic and market outlookChina’s gold rush has much further to runChina Activity Proxy: Growth picks up thanks to fiscal boostPBOC at the mercy of leadership’s muddled prioritiesHow to fix China’s property destocking scheme