Calm before the storm

It was great to be back in New York this month. As aways, there was fantastic energy and dynamism. Airports and restaurants were full, consistent with ongoing resilience in the hard US economic data. Certainly US equity markets are pricing in good scenarios, on hopes that the tariff end-state will be OK, that technology will continue to support earnings and GDP growth, and so on.

But this might be a touch complacent. Beneath the surface, there is concern about economic risks (tariffs, fiscal) as well as growing political/institutional stress (from Fed independence to higher education and research). Indeed, from tariffs to monetary policy and geopolitical relations, it is evident that we are moving towards a new economic and geopolitical regime. Although much of this is not yet evident in the economic and firm-level data, it will come.

This note discusses seven recent global economic and geopolitical developments that provide insight into how this new world is shaping up. 

The full note is available at: https://davidskilling.substack.com/p/calm-before-the-storm