The Flip Side

US President-elect Donald Trump has indicated his incoming administration will make major policy changes on everything from tariffs to taxes, all the the potential to transform the global economy. Will Trump's policies lead to sweeping economic change or will the effects be incremental? In episode 66 of The Flip Side, Brad Rogoff, Head of Research and Global Chairman of Research, Ajay Rajadhyaksha, dive into these big questions.They examine the potential effects of implementing large-scale immigration reforms and deportations, which would have ripple effects on the labour market, particularly for industries reliant on undocumented workers. Brand and Ajay also explore the promise of deregulation, debating whether reducing regulatory hurdles for businesses can truly accelerate economic growth. Lastly, they tackle looming questions around tariffs and tax cuts, considering their potential to disrupt or stimulate trade and investment.

The podcast dives into China's latest economic stimulus measures, like interest rate cuts and mortgage tweaks, sparking debate on their real impact. While financial markets initially soared, concerns linger about the effectiveness of these policies against falling home prices and debt challenges. Discussions highlight a shift towards boosting consumer confidence with cash handouts, but skepticism remains regarding the actual benefits to global growth. Ultimately, the hosts examine whether these moves represent genuine recovery or mere temporary fixes.

Recent financial market volatility raises questions about a potential US recession. Analysts discuss the impact of rising unemployment and inflation on expectations. The shifting focus from high-valued AI stocks to smaller companies reflects changing market dynamics. Additionally, the unwinding of Japan’s carry trade contributes to global investment fluctuations. The conversation also highlights how these market changes affect consumer spending and the broader economic landscape.

Corporate bond and loan markets have traditionally been rigid when compared to equity markets, characterised by low liquidity, low trading volumes and higher transaction costs. In recent years, the explosion of credit ETFs and the growth of private credit markets has meant all that is changing, causing what our Research analysts call the ‘equitification’ of credit.In episode 63 of The Flip Side Global Head of Research Jeff Meli and Head of Thematic Fixed Income Research Zornitsa Todorova debate the upsides and downsides of this emerging trend and which investors stand to benefit.Read more on the Five Forces Reshaping Fixed Income Markets.

US carbon emissions are down c.20% from their peak over the past 20 years, thanks primarily to efficiency gains, such as increased miles per gallon for cars, switching to LED lights and moving towards high-efficiency boilers.Further emission reductions will require more changes from consumers on a number of fronts, such as switching from fossil fuels to electricity for cars, home heating, and so on.The US government is trying to influence behaviours through a range of subsidies and incentives. Is pushing on all fronts the best approach, or should efforts concentrate on one big issue that can have an outsized impact over the long term?In episode 62 of The Flip Side, Global Head of Research Jeff Meli debates that question with Will Thompson from our Sustainable and Thematic Investing Research team.

The podcast debates if the Fed deserves credit for declining inflation in the US without causing a recession. Factors like market expectations, post-pandemic economic realities, labor force shifts, and housing stock availability are considered as driving forces of cooling alongside the Fed's monetary policy.

The conversation dives into how AI and large language models like ChatGPT can revolutionize productivity across various sectors. Historical insights reveal that tech advancements, including smartphones, yield benefits over time. The transformational potential of AI is likened to electricity, promising rapid productivity gains but also raising job displacement concerns. The need for workforce reskilling and updated public policies, such as taxation and antitrust measures, emerges as crucial in navigating AI's economic impact.

The podcast discusses the sustainability of the rising US national debt levels and the potential crisis it may lead to. It explores the impact of AI investment on the economy and debt, the challenges in finding a solution to the increasing debt, the implications of new regulations on intermediation in the treasury market, and the concerns about market shocks and the intervention of the Federal Reserve.

Exploring the disconnect between strong economy performance and volatile equity markets, influenced by rising bond yields and mega-cap stocks. Debate on optimistic S&P 500 earnings growth amidst low inflation and the role of AI in shaping future earnings. Analyzing the potential impact of rate hikes on the labor market and economy, with contrasting views on resilience versus vulnerabilities. Exploring the relationship between economic indicators and market reactions, including yield curve implications and misconceptions about Fed influence.

Barclays analysts discuss the impact of COVID-19 on the US housing market, including rising prices and the potential for a major correction. They explore fluctuations in the market, the influence of interest rates, and the importance of new homes. The impact of interest rates on housing demand is examined, along with the reasons behind the shortage of housing supply in the US.