Macro Bytes

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156

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Jun 2026

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Macro Bytes

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June 3, 202631 min

Where do interest rates go if growth weakens but inflation increases?

Most central banks started the year preparing to cut interest rates further. Then geopolitics intervened. In this episode Paul and Luke unpack how the Iran-driven energy shock has upended rate expectations, why different central banks are responding in different ways, and what that means for inflation and growth. We also tackle two key market questions: what will new Fed chair Kevin Warsh do with the balance sheet, and can equities stay resilient as inflation spikes and yields rise?

May 20, 202636 min

Space, the final frontier for the economy? - with Hannah Lee, JP Morgan

Near earth orbit is increasingly a site of economic activity, and a domain of great power competition. Paul and Luke are joined by Hannah Lee, Thematic Investment Researcher at JP Morgan, to discuss how the collapse in launch costs has opened up a wide range of commercial use cases for space, the prospect of placing data centres, semi-conductor fabrication, and pharmaceutical development in orbit, and the way in which space has become a strategic military domain.

May 6, 202642 min

If UK PM Starmer goes, what changes, what doesn’t, and what markets will price?

The UK local and devolved regional elections are shaping up to be rough for the incumbent Labour party. Speculation about political leadership change is likely to increase as a result. If there is a change of UK Prime Minister (and Chancellor), who could it be, what would be the process, and most importantly for Macro Bytes, what are the economic and market implications? Paul and Lizzy lay out the runners-and-riders, and the possible policy changes across tax-and-spend, regulation, Europe, and defence policy.

April 22, 202621 min

Who is winning the US-China AI race?

The release of China’s Deepseek R1 model last year, which rivalled many US large language models but was trained at a fraction of the cost, seemed to kick-off a new realm of competition between the US and China. Luke is joined by Robert Gilhooly, Senior Emerging Markets Economist at Aberdeen, to discuss the nature of the AI race between the US and China, who is currently winning, whether government strategies around things like export controls and energy policy can help determine who the winner might ultimately be, and whether even framing the contest as a “race” with a single “winner” is the right way to think about how the technology and policy is likely to evolve.

April 2, 202622 min

How are investors responding to the Iran conflict? – with Victoria Scholar from interactive investor

The Iran war is now in its 5th week, longer than many in the market seem to have been expecting, and it continues to be a source of significant asset price volatility. Paul and Luke are joined by Victoria Scholar, Head of Investment at interactive investor, to consider the market and investor reaction to the conflict. They discuss the significance of the oil price as both barometer and transmission mechanism of the conflict, the performance of EM vs DM markets, investor interest in gold, where diversification can be found in a geopolitical crisis, and whether retail investors can be better contrarians at market turning points.

March 5, 202634 min

Conflict in Iran: how long will it last, and what will be the economic impact?

The war in Iran and the wider Middle East has dealt a significant blow to asset prices. Paul, Luke and Lizzy look at the US and Israel’s war aims and examine why Iran’s response has been larger than expected. They go on to consider what asset prices appear to be pricing in about the likely outcome of the conflict, and what this could mean for growth, inflation and interest rates. They also reflect on how US policy fits within Trump’s broader foreign policy agenda.

February 26, 202635 min

Can Europe innovate at war(p) speed? - with the NATO Innovation Fund

The war in Ukraine is now four years old, and the nature of modern warfighting - and Europe’s defence needs - has shifted dramatically as a result. Lizzy and Paul talk to John Ridge and Erin Hallock of the NATO Innovation Fund, a multi‑government‑backed venture capital fund, about the accelerating pace of innovation on the battlefield, why governments must procure and adopt defence technology far faster to turn late‑stage prototypes into scalable capability, and how the Fund is finding and funding early‑stage defence, security and resilience businesses.

February 12, 202642 min

Does politics matter for markets? - with Jens Larsen of Eurasia Group

2026 has started with a flurry of political shocks. Luke and Lizzy talk to Jens Larsen, Practice Head of Geoeconomics at Eurasia Group, about the structurally elevated geopolitical volatility that investors now face and why this matter to markets. They discuss the fundamental drivers of heightened political risk, including the end of the unipolar moment and the re-emergence of great power competition, the break down in operating consensus that underpinned domestic politics until recently, the chance of US military action in Iran, and whether UK fiscal policy will change significantly under a potential new prime minister and Chancellor.

January 29, 202632 min

Will the trade war become a capital war?

With President Trump threatening fresh tariffs on various economies, trade wars are back in focus. Moreover, the risk of the trade war spreading to a capital war has become more pressing. The EU has been considering activating its “Anti-Coercion Instrument” in response to US threats to Greenland, which could see services trade and capital flows targeted. Paul, Luke, and Lizzy discuss how a capital war could be the next stage of the global trade war, where the EU may have leverage over the US in such a conflict, the prospect of European institutions dumping US treasury holdings, and whether the US capital account surplus is really a chokepoint trading partners could exploit.

January 16, 202635 min

What will the ‘Donroe Doctrine’ mean for global macro and markets?

The recent US intervention in Venezuela is a vivid demonstration of the new so-called ‘Donroe Doctrine’ asserting complete US supremacy in the western hemisphere. Paul, Luke, and Lizzy discuss the historical context of America’s new foreign policy stance and what it might mean for various neighbours including Brazil, Colombia, Mexico, Cuba, and Greenland. They also consider potential read across for Iran, Russia-Ukraine, and China-Taiwan, and whether it makes other conflicts more likely.