Rising demand for critical microelectronics, bolstered by AI capex and defense spending, is driving semiconductor prices higher and posing upside risks to global goods inflation.

The tradeoffs, drivers, and management of the Federal Reserve’s balance sheet have come back into market focus this month with Chairman Powell shifting market expectations for the end of quantitative tightening.

The current global expansion has been characterized as one of US exceptionalism. Despite many developed market economies outperforming low expectations, the robustness of the US expansion has stood out. We believe this can continue based on differences between the US and European economies.

The Federal Reserve’s balance sheet is one of the world’s most important security portfolios. Yet, its ongoing importance for markets and financial conditions is often underappreciated.

Monetary and fiscal policy are typically thought of as independent tools that central banks and governments use to manage the economy.