The Weekly Briefing from Capital Economics

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  The Fed, the World, and China Shock 2.0 18.09.2026 11min

  Neil Shearing and Jennifer McKeown unpack a pivotal week for the world's major central banks. They discuss the Federal Reserve's latest rate hike and what it says about the independence of central banks in an era of political pressure. They then talk about why the market may be mispricing the future path of interest rates in the US, euro-zone, Japan and the UK. Finally, they discuss Capital Economics' new China Shock 2.0 research programme, exploring how China's export surge is reshaping the global economy and creating challenges and opportunities for Europe, Asia and beyond.Find out more about our China Shock 2.0 work and upcoming events:https://www.capitaleconomics.com/events#in-personhttps://www.capitaleconomics.com/key-issues/china-shock-20 
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  Neil Shearing on China Shock 2.0 10.09.2026 17min

  The stunning surge in Chinese exports bears comparison with what happened during the first China shock of the early 2000s. But this time is different: the scale is much larger, the goods being exported are much more advanced and the geopolitical environment is much more fraught.In this special episode of The Weekly Briefing, Group – Chief Economist Neil Shearing introduces Capital Economics' new series on China Shock 2.0, explaining what this shock means for the global economy, why the costs this time are falling hardest on Europe and why an orderly adjustment to global imbalances looks out of reach. Find out more about our events happening in North America, Europe and Asia this autumn:https://www.capitaleconomics.com/events#in-person 
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  That hot jobs report and the Fed's September meeting 04.09.2026 29min

  That was a much hotter payrolls report than the market had expected, but how will it influence this month’s Fed decision? With inflation risks still prevalent, how will the ECB and Bank of England approach their September meetings? And what does the surge in bond yields mean for economies?Group Chief Economist Neil Shearing and Chief North America Economist Stephen Brown join David Wilder on the latest episode of The Weekly Briefing to discuss energy prices, bond yields, inflation risks and what they mean for the path of interest rates.Also on the show, with resurgent energy prices adding to the dilemma facing central bankers and bond markets, we hear an exclusive excerpt from a recent client briefing on our outlook for markets. Our Commodities team looks at the near-term risks to oil product prices and natural gas supply, as well as what the US-Venezuela oil deal could mean for energy markets.Related contentGlobal Drop-In: Post-summer macro and markets outlook, Tuesday 8th September 0900 BST/1600 SGT: https://www.capitaleconomics.com/events/global-drop-post-summer-macro-and-markets-outlook 1000 ET/1500 BST: https://www.capitaleconomics.com/events/global-drop-post-summer-macro-and-markets-outlook-0 Watch now: Commodities catch-up – What next for energy, gold and agriculturals?https://www.capitaleconomics.com/events/drop-commodities-catch-what-next-energy-gold-and-agriculturals
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  AI earnings and equities, gauging Bessent’s success and Iran’s economic squeeze 27.08.2026 24min

  Can another set of blow-out AI earnings reignite the rally that has powered equities for so long but recently seems to have run out of puff?Chief Markets Economist Jonas Goltermann joins The Weekly Briefing from Capital Economics to discuss the latest tech earnings, whether Scott Bessent has managed to cap Treasury yields and what investors will want to hear from Kevin Warsh in his Jackson Hole address.Also on the show, just days after Bessent announced ‘Economic D-Day’ for Iran, Chief Emerging Markets Economist William Jackson assesses how much pain the Iranian economy is in and whether further pressure from the Trump administration could be enough to force Tehran to capitulate.Related contentConcentrated earnings probably mean concentrated returnshttps://www.capitaleconomics.com/publications/capital-daily/concentrated-earnings-probably-mean-concentrated-returnsCan Iran continue to hold out?https://www.capitaleconomics.com/publications/middle-east-north-africa-economics-update/can-iran-continue-hold-out
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  The great global bond sell-off – causes, consequences and what comes next 21.08.2026 24min

  This special episode of The Weekly Briefing from Capital Economics features an exclusive extract from our client briefing on the global bond sell-off, its causes, consequences and where markets go from here. In this edited extract, Group Chief Economist Neil Shearing and Chief Markets Economist Jonas Goltermann answer questions from clients around the world, including:What was Scott Bessent’s Treasury market intervention intended to achieve, and why it has so far fallen short?What are the economic forces pushing investors to demand more compensation for holding long-dated government bonds?Which economies are most exposed to a fiscal crisis?Is the AI credit boom affecting demand for government debt?How high could bond yields rise from here?Related contentRead: How to think about the bond market sell-offhttps://www.capitaleconomics.com/publications/global-economics-focus/how-think-about-bond-market-sellRead: What taxes could Burnham raise to fund his policy ambitions?https://www.capitaleconomics.com/publications/uk-economics-update/what-taxes-could-burnham-raise-fund-his-policy-ambitions
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  A polarised US rate debate, China's lost reform and the £25bn question 14.08.2026 27min

  Have a couple of softer US inflation prints taken a post-Summer Fed rate hike off the table? Did that CPI and PPI data vindicate Kevin Warsh’s divisive approach to central bank communications? And what does the death of former Premier Zhu Rongji tell us about China’s political economy today?Group Chief Economist Neil Shearing joins David Wilder to discuss the US inflation and rate outlook, the angst at the long end of the Treasury yield curve, and why the pace and nature of reform in China today not only pales in comparison what was happening at the turn of the century, but could threaten global economic stability.Also on the show, Deputy Chief UK Economist Ruth Gregory discusses her widely covered report on how much tax Andy Burnham could be seeking to raise in October’s Budget. She explains how the potential tax increases compare with the controversial big Budget of 2024, which taxes could rise and what the impact could be on the UK economy.Related contentWhat taxes could Burnham raise to fund his policy ambitions?https://www.capitaleconomics.com/publications/uk-economics-update/what-taxes-could-burnham-raise-fund-his-policy-ambitionsCapital Economics eventshttps://www.capitaleconomics.com/events
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  Is a September Fed hike off the table? The yen rescue. EM risks. 07.08.2026 40min

  A jam-packed episode begins with Group Chief Economist Neil Shearing joining David Wilder to discuss what a surprisingly weak US employment report means for expectations that the Federal Reserve will cut interest rates in September.Neil and David are then joined by Chief Markets Economist Jonas Goltermann to unpack the implications of coordinated US-Japanese intervention to halt the yen's slide. They discuss everything from Prime Minister Takaichi's policy agenda and its impact on market perceptions of the currency to whether Scott Bessent's move was also intended to send a message to Beijing about an undervalued renminbi.Finally, Senior Emerging Markets Economist Liam Peach examines the latest update to our EM Financial Risk Indicators, highlighting where we see the greatest risks of a crisis and why, despite the recent energy shock, most emerging markets have remained remarkably resilient.Related contentHow worried should investors be about Takaichi’s policies?https://www.capitaleconomics.com/publications/japan-economics-focus/how-worried-should-investors-be-about-takaichis-policiesYour questions on Japan’s markets answeredhttps://www.capitaleconomics.com/publications/fx-markets-update/your-questions-japans-markets-answeredEM Financial Risk Monitor (Jul. 2026)https://www.capitaleconomics.com/publications/emerging-markets-financial-risk-monitor/em-financial-risk-monitor-jul-2026
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  Kevin Warsh's failure to communicate. Plus: Europe's wildfires 31.07.2026 27min

  Kevin Warsh sent financial markets into turmoil with a press conference that muddied, rather than clarified, the Fed's message. But was the confusion all part of a broader strategy from a Federal Reserve chair who takes a dim view of forward guidance? On the latest episode of The Weekly Briefing from Capital Economics, Group Chief Economist Neil Shearing joins David Wilder to discuss why he doesn't think the new chair deserves the benefit of the doubt, and why clearer communication will be essential if the Fed is to preserve its inflation-fighting credibility.Also on the show, Chief Europe Economist Andrew Kenningham explains why, despite the horrific scenes unfolding across southern Europe, this summer's wildfires are likely to have only a limited economic impact.Related contentThe renminbi could not rebalance China on its ownhttps://www.capitaleconomics.com/publications/china-economics-update/renminbi-could-not-rebalance-china-its-ownLittle macroeconomic impact of horrific wildfireshttps://www.capitaleconomics.com/publications/europe-economics-update/little-macroeconomic-impact-horrific-wildfires
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  Trade wars, shooting wars and the AI investment boom 24.07.2026 23min

  Group Chief Economist Neil Shearing unpacks another turbulent week for the global economy. He talks to David Wilder about the latest escalation in the US trade war, the economic fallout from rising tensions with Iran and higher oil prices and why the AI investment boom continues to reshape growth in the US and China.Trade war: What's behind the Trump administration's latest tariff announcements and why global trade has remained surprisingly resilient.Shooting war: After oil $100 a barrel again, what are the implications for inflation and central banks if tensions in the Middle East continue to escalate?AI boom: How AI investment is now the major driver of growth in both the US and China, and what happens if the boom turns to bust? Related contentFed preview: Rate hikes coming, but not until Septemberhttps://www.capitaleconomics.com/publications/us-fed-watch/rate-hikes-coming-not-until-septemberBank of England preview: BoE to hold rates as energy prices keep rate hikes in playhttps://www.capitaleconomics.com/publications/boe-watch/boe-watch-boe-hold-rates-energy-prices-keep-rate-hikes-playWhat is the future of US tariffs?https://www.capitaleconomics.com/publications/global-economics-update/what-future-us-tariffs
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  The next oil shock? And China's economy after the GDP miss 17.07.2026 34min

  The collapse of the US-Iran ceasefire has triggered another spike in oil prices and put markets back on edge. Neil Shearing joins David Wilder to discuss whether the world is heading for another oil shock and what it would mean for growth and inflation. He also explains how Kevin Warsh's warning that the Fed has "no tolerance for persistently elevated inflation" could translate into policy.Also on the show, Julian Evans-Pritchard unpacks China's disappointing Q2 GDP figures, including the role AI is playing in shoring up activity, explains why the People's Bank of China isn't more concerned about slowing credit growth and discusses what to expect on the stimulus front.Related contentThe implications of a renewed closure of the Straithttps://www.capitaleconomics.com/publications/global-economics-update/implications-renewed-closure-straitGlobal Economic Outlook: US strength points to renewed policy divergencehttps://www.capitaleconomics.com/publications/global-economic-outlook/us-strength-points-renewed-policy-divergence-0UK Drop-In: The Burnham government – will policy ambition collide with economic reality?https://www.capitaleconomics.com/events/uk-drop-burnham-government-will-policy-ambition-collide-economic-realityWhy Burnham will struggle to revive UK growthhttps://www.capitaleconomics.com/publications/uk-economics-focus/why-burnham-will-struggle-revive-uk-growth
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  Jennifer McKeown on where next for the advanced economies 10.07.2026 26min

  It's far too soon to be worrying about another spike in inflation from renewed fighting in the Middle East. That's one of the key messages from Capital Economics' Global Chief Economist Jennifer McKeown, who joins David Wilder on The Weekly Briefing with Neil Shearing away this week.Jenny explains what could drive the Fed to raise interest rates as early as September, whether economies on both sides of the Atlantic can continue to hold up and where we think the consensus is wrong on the outlook for interest rates.Also on the show, in an exclusive excerpt from a recent online client briefing on AI, Chief Economic Adviser Vicky Redwood explains where the technology's impact is already showing up in the data, and what happens to the global economy if AI's promised productivity gains never materialise.Related contentCapital Economics Key Issues: AIDrop-In: AI's global shockwaves – Macro and market implications
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  From boom to bust: the AI equity rally in its final phase 03.07.2026 32min

  For the past three years, our Markets team has been more optimistic than most about the AI-driven rally in global equities. That view has been borne out by events. Now they believe the rally has entered its final phase and that a sharp downturn will follow.  On this week's The Weekly Briefing, Chief Markets Economist Jonas Goltermann explains why we think the correction is coming in 2027, what to expect before the plunge and whether the Fed will play a role in the rally's demise. Also on the show, Climate and Commodities Economist Hamad Hussain discusses why our long-standing forecast that gold prices would retreat from their record highs is playing out, and why prices have further to fall from here.Related content:Drop-In: AI's global shockwaves – Macro and market implicationsAsset Allocation Outlook: The AI equity boom reaching its final inningshttps://www.capitaleconomics.com/publications/asset-allocation-outlook/ai-equity-boom-reaching-its-final-inningsCommodities Outlook: Beyond Hormuz – the path back to an oil gluthttps://www.capitaleconomics.com/publications/commodities-outlook/beyond-hormuz-path-back-oil-glut
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  AI's macro boost, a hawkish Fed and Burnham's balancing act 26.06.2026 32min

  Our flagship Global Economic Outlook is just around the corner, and in this latest episode of The Weekly Briefing, Group Chief Economist Neil Shearing previews our view of a world in which some economies are benefiting from the AI investment boom while others are falling behind. He also discusses what to expect from next week’s US employment report and why markets are underestimating just how hawkish the Fed may need to remain to bring inflation back to target.Also on the show, with Andy Burnham’s 'coronation' as the UK’s next prime minister looking increasingly likely, what do we know about the new government’s plans? Paul Dales and Ruth Gregory from our UK team discuss the fiscal constraints that will limit a Burnham government’s spending ambitions, while explaining why falling inflation could allow the Bank of England to deliver much more monetary easing than markets currently expect.Related contentUK Economic Outlook: Fall in inflation to 2.0% in 2027 to trigger rate cutshttps://www.capitaleconomics.com/publications/uk-economic-outlook/fall-inflation-20-2027-trigger-rate-cutsCapital Economics Eventshttps://www.capitaleconomics.com/events
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  Tough economic choices in a fragile peace 19.06.2026 23min

  A peace deal that's already showing signs of strain. Central bankers still wrestling with inflation. A new Fed chair seeking reform. And a UK local election with implications for the bond market.It’s been a busy week for macro and markets, and Group Chief Economist Neil Shearing joins David Wilder to make sense of it all. Neil explains what the increasingly fragile US-Iran peace deal means for global oil supplies and the outlook for inflation and interest rates.  In his discussion, Neil reviews Kevin Warsh's first meeting as Fed chair, considers the outlook for US interest rates, examines mounting trade tensions between Europe and China, and explains why the UK's next prime minister may find fiscal promises difficult to keep. 
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  Fed preview: The case for raising rates | Oil's turning point? 12.06.2026 30min

  Relatively strong US growth, sticky inflation and a resilient labour market have strengthened the case for further Fed tightening. In this week's episode of The Weekly Briefing, Chief North America Economist Stephen Brown tells David Wilder why rates may rise again before year-end and what to expect from Kevin Warsh's first meeting as Fed Chair.Before that, it's Groundhog Friday, as Donald Trump again talks up an imminent deal to reopen the Strait of Hormuz. But what if this time it really is for real and a US-Iran deal does get done? Group Chief Economist Neil Shearing discusses how the outlook could shift if energy starts flowing again, but also explains the economic risks if any deal later falls apart as crude reserves run down.Related contentFed on hold as Warsh faces a fractious FOMCBoE may not follow the central bank crowd in raising ratesBoJ on track to hike despite Ueda’s absence
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  Fed hikes, inflation risks and AI stocks 05.06.2026 28min

  Are we moving towards Fed rate hikes? Even before the release of a strong May US employment report, Group Chief Economist Neil Shearing joined The Weekly Briefing to explain why shifting dynamics on the FOMC mean the Federal Reserve could emerge from the summer weighing the need for tighter policy to contain inflation.Plus, after another extraordinary surge in AI stocks, Chief Economic Adviser for Financial Markets John Higgins discusses how much further the rally could run, whether current earnings growth is sustainable and what could ultimately burst the stock market bubble.Related contentBar to Fed hikes appears relatively lowCapital Economics events
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  A deal at last? What a Hormuz reopening would mean for oil and inflation 29.05.2026 23min

  This could prove another false dawn, or the US and Iran could finally reach an agreement to reopen the Strait of Hormuz to oil and gas shipments. But even if the strait reopens, energy flows, oil prices and, by extension, inflation won’t snap back quickly to pre-war levels.Group Chief Economist Neil Shearing and Chief Climate & Commodities Economist David Oxley join the latest episode of The Weekly Briefing to discuss the new normal for global energy markets and what it means for the world economy.They explain why inflation pressures are still likely to build in the weeks ahead, even as market expectations for central bank responses have tempered in recent days. And they discuss how governments and the energy industry are now scrambling to build alternative supply routes and reduce the Strait of Hormuz’s potency as a geopolitical choke point.
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  This bond market wobble won't be the last 22.05.2026 30min

  This latest wobble in the bond market almost certainly won’t be the last. Group Chief Economist Neil Shearing and Chief Markets Economist Jonas Goltermann join David Wilder on the latest episode of the Weekly Briefing to discuss the forces that have driven bond yields to multi-year highs. They examine shifting perceptions around inflation as the closure of the Strait of Hormuz drags on, the fiscal worries gnawing away at investor sentiment across the advanced economies and we're entering a world where inflation settles structurally higher than the 2% era policymakers once took for granted. And with Japan’s yield curve steepening sharply, they also discuss whether investors are beginning to question the Bank of Japan’s grip on reflation. Also on the show, India economist Shilan Shah calls in from Mumbai to discuss how record temperatures and the global energy shock are complicating the Reserve Bank’s efforts to contain inflation pressures. He discusses the risks7 facing the rupee, the prospect of tighter monetary policy, and how the current dilemma compares with crises past. Related contentWatch: Markets Drop-In: AI-driven paradigm shift or dotcom bubble redux? What’s next for equitieshttps://www.capitaleconomics.com/events/markets-drop-ai-driven-paradigm-shift-or-dotcom-bubble-redux-whats-next-equitiesRead: Heatwave completes trifecta of risks for Indiahttps://www.capitaleconomics.com/publications/india-economics-update/heatwave-completes-trifecta-risks-indiaExplore: Fiscal Riskshttps://www.capitaleconomics.com/key-issues/fiscal-risks
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  UK Labour party meltdown, gilt yields and why the bond market always wins 15.05.2026 29min

  Westminster is gripped by the game of thrones around Labour's slow-mo leadership drama, which could deliver the UK's seventh prime minister in ten years. But for markets and the economy, the stakes are very real. Chief UK Economist Paul Dales tells David Wilder why. He says all the leading contenders to replace Starmer would, to varying degrees, open the spending taps but also explains why the bond market is likely to push back hard. Paul also makes the case for the UK's medium-term outlook looking brighter than many assume, though not because of who's in charge of the country.Also on the show, Group Chief Economist Neil Shearing discusses why the latest activity data suggest the global economy has so far proved surprisingly resilient in the face of the Iran conflict – and why that resilience could soon be tested. 
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  The Trump-Xi meeting and the limits of a reset | Germany’s overdone pessimism 08.05.2026 37min

  Donald Trump travels to Beijing next week for a long-awaited summit with Xi Jinping that carries huge geopolitical significance, but one where investors should keep expectations firmly in check. Group Chief Economist Neil Shearing and Head of China Economics Julian Evans-Pritchard join David Wilder to assess the state of the US-China relationship and why any apparent thaw in tensions may prove superficial. They discuss issues including: Why Beijing increasingly sees the US as a power in relative decline, and how that is shaping Chinese strategy;  Why the structural forces pushing the US and China apart are likely to outlast any short-term diplomatic reset;  What’s driving the recent improvement in China’s economy, and how that could exacerbate global tensions. Also on the show, Chief Europe Economist Andrew Kenningham returns from client meetings in Germany to explain why those who had been expecting an economic turnaround last year have been left disappointed, but to also argue that the prevailing gloom around both the German economy and its politics has become excessive.Related content:Read: What would a new PM mean for the UK economy and markets?https://www.capitaleconomics.com/publications/uk-economics-update/what-would-new-pm-mean-uk-economy-and-marketsRegister: Drop-In: Is the energy shock supercharging the Chinese export boom?https://www.capitaleconomics.com/events/drop-energy-shock-supercharging-chinese-export-boomRead: Taking stock of the German fiscal stimulushttps://www.capitaleconomics.com/publications/europe-economics-update/taking-stock-german-fiscal-stimulusRead: Fiscal stimulus won’t fix Germany’s economyhttps://www.capitaleconomics.com/publications/europe-economics-focus/fiscal-stimulus-wont-fix-germanys-economy