Macro Bytes

With less than one week to go until the second round of the Brazilian presidential election, Lizzy Galbraith is joined by Tettey Addy to discuss the candidacies of Flavio Bolsonaro and incumbent President Luiz Inácio Lula da Silva, including what the first round tells us about the likely outcome, whether the next president can meet investor expectations of ambitious fiscal reform, and what the outcome means for Brazilian foreign policy.

President Trump may not be on the ballot, but the 2026 US midterms are shaping up to be a referendum on his presidency. Paul Diggle and Lizzy Galbraith unpack strong Democratic momentum, what Aberdeen's election model implies for control of Congress, the key Senate battlegrounds to watch, and what different election outcomes could mean for fiscal policy, AI regulation, and financial markets.

The global monetary policy cycle has turned back to hiking, following two years of (nearly) synchronised rate cuts.

In this episode of Macro Bytes, Chief Economist Paul Diggle is joined by Jon Butcher, Felix Feather and Sree Kochugovindan from Aberdeen's Global Macro Research team to discuss the shift back towards monetary tightening.

A week or two on from major decisions from the US Federal Reserve, Bank of England, European Central Bank and Bank of Japan, the team assesses whether policymakers are delivering a small number of "risk management" rate hikes, or embarking on a sustained...

AI may be digital, but its success depends on a very physical reality: data centre construction. As investment in AI infrastructure surges, local opposition is growing too, with concerns over power use, water consumption, visual intrusion, and noise all prominent. In this episode, Paul and Lizzy are joined by Nancy Hardie from Aberdeen’s sustainability team, and Tim O'Reilly from datacentre developer Tritax. They explore the economics, politics and geopolitics of the AI infrastructure buildout. Is opposition to datacentre construction a risk to the “AI trade”? Is this backlash a stand-in for broader societal concerns about who benefits from, and wh...

Long-term bond yields have been hitting multi-decade highs. Lizzy Galbraith and Paul Diggle discuss the drivers of this increase in government borrowing costs, what policymakers can and can’t do about it, and at what point higher yields weigh on the economy and broader financial markets. The AI capital investment boom and hyperscaler issuance are playing an important role in driving yields up, but that may turn mean that the impact is different to what conventional wisdom would suggest.

Andy Burnham is set to become Britain’s Prime Minister on 20 July and promises a new style of governance - “Manchesterism”. Luke and Lizzy discuss what Manchesterism means in practice, whether devolution is a credible growth strategy, how a Burnham government might navigate financial markets, and how tight fiscal constraints could ultimately limit both its policy agenda and political fortunes.

Many economists and investors try to predict the business cycle in order to time their investments into financial markets. In this episode, Paul and Luke speak to Tyler Goodspeed, author of “Recession: The Real Reasons Economies Shrink and What to Do About It”, who rejects much conventional wisdom on the business cycle, arguing instead that recessions are the result of external shocks that cannot be predicted. They discuss why humans are pre-disposed to see patterns in economic data, the usefulness or otherwise of business cycle timing indicators, and the likelihood of the current energy shock causing a recession.

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?

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.

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. 

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...

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...

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.

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.

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.

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 treasu...

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.

The coming year is going to see more economic and geopolitical volatility for investors to navigate. Paul asks members of the Aberdeen Investments research team to outline the big questions they are asking as we head into 2026 – including the outlook for monetary policy under a new Fed chair, whether China can tackle its deflation problem, and the risk of an AI bubble bursting.

The much-anticipated UK budget has finally been announced. Paul and Luke are joined by Lizzy Galbraith to break down the economic and market implications of the tax rises, spending increases, and higher fiscal headroom. Financial markets liked what they saw in the budget, but the team highlight the backloaded nature of the tax increases, question markets around future spending plans, and the possibility of change at the top of UK politics in 2026.

The world isn’t deglobalising, it’s fracturing – splitting into US and China blocs, along manufacturing, technological, and financial lines. Paul speaks to Neil Shearing, Group Chief Economist at Capital Economics and author of The Fractured Age: How the Return of Geopolitics Will Splinter the Global Economy. Paul and Neil talk about what the hyper-globalisation consensus that economic interdependence was stabilising got wrong, how the return of superpower rivalry will force other countries to pick a side, and the ways investors can navigate this new economic and geopolitical environment.

US export controls on high-end semiconductor chips, and Chinese control over rare earth supply, are just the most recent examples of major economies weaponising chokepoints in the global economy. Paul and Luke speak to Edward Fishman, a former US State Department sanctions official, Colombia University professor, and author of “Chokepoints: How the Global Economy Became a Weapon of War”, about the US’s and increasingly China’s control over these chokepoints, how financial and legal chokepoints arise out of the structure of the modern global economy, and how major powers use chokepoints to pursue their geopolitical interests. 

France has been cycling through Prime Ministers, as the government struggles to pass a budget through a divided parliament. Paul and Luke talk to Lizzy Galbraith and Felix Feather about France’s political and fiscal challenges, what’s unique about France’s problems compared to other ageing and indebted Western democracies, and what a potential victory for the extremes of French politics at the 2027 Presidential election would mean for the economy and markets. 

With the US Federal Reserve under intense political pressure and the labour market at an inflection point, understanding how the FOMC might respond to shocks is critical for financial markets. Paul and Luke talk to Professor Tara Sinclair of George Washington University about her groundbreaking working paper FOMC in Silico, which uses AI personas to model the Fed’s decision-making process. They also explore how AI can augment decision-making more broadly and assess its impact on the labour market. 

The UK Budget is about two months away. The Chancellor is once again facing the prospect of her fiscal rules being breached, and the likely need to tighten fiscal policy. Paul Diggle and Luke Bartholomew are joined by Lizzy Galbraith, senior political economist at Aberdeen, to discuss the Chancellor’s tough choices, potential tax increases, and the state of the UK economy more broadly.

The independence of the Federal Reserve is under sustained attack from the Trump administration. But despite the totemic significance of the Fed to the global financial system, markets so far seem relatively sanguine. Luke and Paul discuss the history of independent central banks, why they matter so much to the economy, and what the journey to full fiscal dominance might look like. They also talk to Aaron Rock and Max Macmillan, senior fixed income and macro investors at Aberdeen, about how they think about monetary policy independence and whether markets should be more worried about fiscal dominance.

Stablecoins are digital assets often tied to the value of a fiat currency, such as the dollar. They have the potential to reshape the financial and economic order. In this episode, Luke and Paul discuss what they are, how they may affect the ways in which we pay for goods and services, how they are being regulated and what it might mean economically. In the spotlight are public sector debt dynamics, the status of the US dollar, how central banks set monetary policy and whether stablecoins pose risks to financial stability.

US macro hasn’t taken the summer off. Between tariff threats and trade deals, slowing growth and massive jobs data revisions, and Trump firing the head of the statistics authority and getting an early pick for a new Fed “shadow Chair”, there’s a lot to catch up on. Luke and Paul explain what all this means for the economic outlook, markets, and monetary policy.  

Infrastructure is one of the foundations on which economies are built. It’s essential for meeting the needs of growing and ageing populations, it has a role to play in the defence build-outs that are required in a more volatile geopolitical environment, and its increasingly critical to the energy and climate transitions. New research from Aberdeen suggests at least $64 trillion will need to be spent on infrastructure globally over the next 25 years. Paul Diggle is joined by Robert Gilhooly and Sameer Amin to discuss how “infrastructure gaps” can be identified and quantified, how stretched governments can afford to build infras...

The Trump administration is pursuing a significant fiscal expansion with its “One Big Beautiful Bill” Act. But with long-term bond yields rising, and Section 899 potentially making the US a less attractive place to invest, investor appetite to finance the US deficit may be waning. Paul and Luke discuss the size of the deficit increase, whether tariff revenue can offset tax cuts, and what Elon Musk leaving DOGE means for fiscal policy.

The Argentinian economy has a history going back decades of chronically low growth, high inflation, and successive crises. However, President Javier Milei’s “shock therapy” of fiscal spending cuts, peso devaluation, and an IMF package, appear to be turning things around. The economy has returned to growth; inflation, while still high, has fallen sharply; and Argentina is gradually returning to international capital markets. Paul and Luke speak to Tettey Addy, emerging market analyst at Aberdeen, about Milei’s unexpected successes with economic orthodoxy, and the challenges that still lie ahead.

The US and China have significantly, albeit temporarily, reduced tariff rates. And the US has started to make tariff deals with other countries too, beginning with the UK. So does this mean that economic and market concerns about the trade war were overblown? Paul and Luke speak to Lizzy Galbraith and Bob Gilhooly about why US-China decoupling is still a long term trend, what next for tariff levels, and how much progress the US administration is making on its other priorities including tax cuts. 

The US has long been economically “exceptional”, with its high growth rate, dominant technology companies, and as the provider of the global safe asset and reserve currency.  However, Trump’s tariffs, a possible growth slowdown, and deeper institutional disfunction, could all endanger aspects of this. Paul Diggle and Luke Bartholomew ask whether US exceptionalism is over, whether the US is becoming a structurally less attractive destination for capital, and if the global dollar standard is over. 

President Trump has announced an enormous increase in US tariffs on the rest of the world. But is this a negotiating tactic that will see tariffs fall over time, or a permanent feature of the new global trading system? And given that most investors’ worst case tariff scenario has transpired, what other major shocks could these moves catalyse? Paul Diggle and Luke Bartholomew discuss the design of the reciprocal tariff regime, the possible economic impact on the US, and how things might get better – or worse. 

UK Chancellor Rachel Reeves has announced spending cuts to restore headroom against the government’s fiscal rules. Paul Diggle and Luke Bartholomew are joined by Lizzy Galbraith to discuss the welfare cuts the government has announced, how vulnerable the UK fiscal position is to tariffs and other shocks, and the possibility of future tax increases.

US consumer and business sentiment has fallen significantly recently in response to extremely elevated policy uncertainty with some indicators pointing to elevated recession risks. Luke Bartholomew speaks to James McCann about the sudden deterioration in economic sentiment and how reliable this is as guide to future growth, the current state of play on tariff policy, the impact of DOGE on the job market, and how interest rates might revolve in response to the various shocks hitting the economy. 

The CDU-CSU has emerged as the largest party from the German federal elections, and Friedrich Merz will almost certainly become the next Chancellor at the head of a coalition government. But Germany faces profound economic and geopolitical headwinds, amid a contracting industrial sector and a chaotic European security situation. Paul and Luke speak to Lizzy Galbraith and Felix Feather about Merz’s economic agenda, whether debt brake reform is possible, and if this is the last-chance saloon for the German mainstream. 

Much like the effects of the French revolution, it may be too early to tell the long-term economic impacts of Brexit. 

UK growth and investment have almost certainly been lower, and inflation higher, than otherwise. But as President Trump threatens to tear up the global trading system including targeting the EU with tariffs, and European regulation risks stifling the growth benefits of AI, Paul and Luke discuss how the lasting economic consequences of Brexit are still playing out. 

Investors can be forgiven for having tariff whiplash, after the threat and then temporary reprieve of 25% US tariffs on Canada and Mexico, and the implementation of additional 10% tariffs on China. Paul and Luke speak to James McCann, Bob Gilhooly, and Lizzy Galbraith from the abrdn economics team about the thinking behind President Trump’s tariff strategy, the economic and monetary policy impacts, and what this all tells us about Trump’s broader agenda.

The US dollar is rising as investors price in Trump’s policy platform of tariffs, tax cuts, and deregulation. But key members of the new US administration want to see a weaker dollar to boost domestic manufacturing. Paul and Luke discuss this fundamental dilemma at the heart of the new administration’s economic policy, and how the US may exercise its full array of hard power tools to achieve economic, political, and territorial objectives. 

Elon Musk is set to join the Trump administration as head of the Department of Government Efficiency. Paul and Luke speak to Lizzy Galbraith about the role and influence that Musk and DOGE may have over US fiscal policy, regulation, foreign policy, and the broader Trump agenda.