Economy

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This article is an on-site version of our The Week Ahead newsletter. Subscribers can sign up here to get the newsletter delivered every Sunday. Explore all of our newsletters hereHello and welcome to the working week.It’s anointment time. Barring last-minute blow-ups, Friedrich Merz will be confirmed as chancellor by the German parliament on Tuesday, following a press conference a day earlier to rubber stamp the coalition deal the Christian Democratic Union (CDU) party leader has concluded with the Social Democratic party (SPD). Merz’s cabinet nominations, including Katherina Reiche, a senior executive at German energy group Eon, to run the economy ministry, show an impatience to get on and fix the economic and political problems facing the country. The FT’s Person in the News slot, written before Merz’s election victory, provides a handy profile of the country’s new leader.Next up, conclave. The secretive meeting of 135 Catholic cardinals starts on Wednesday in the Sistine Chapel — a rather more inspiring venue to cast votes than the school halls and community centres that many of us are used to. Kevin Farrell, the man leading the conclave, has been lauded for being “very practical”, which in current times feels like high praise indeed. The next pope will take over at an interesting time for the Catholic Church and, aside from the politics and the theology, there will be some tricky financial challenges ahead, as my colleagues explain here.It’s the 80th anniversary of VE Day on Thursday, which would be a unanimous celebration of liberty if it weren’t for the small matter of Russia’s incursions in Ukraine. President Vladimir Putin has called a 72-hour ceasefire, which would just happen to make things all nice and peachy for his Victory Day commemorations in Moscow, but Ukrainian President Volodymyr Zelenskyy is having none of it. The cloud of conflict in Europe will hang heavy over the other end of war celebrations.Enjoy your last call on Skype, the pioneering Nordic video-calling service, bought by Microsoft 14 years ago, which will be turned off on Monday. The US Big Tech group, which has done well during Trump’s first term, wants us all to instead make Teams calls. Cue soul searching about the failure of European tech start-ups. Time to read that Lunch with the FT at the table with Skype co-founder Niklas Zennström.Corporate news will flow freely this week as we canter further through the first-quarter earnings season. Trump tariffs will be a talking point as some big car manufacturers (Toyota, Ford and BMW) report numbers. Travel trends will be another strong theme, with IAG, Trainline, Marriott and IHG all reporting over the coming days. More details below.The run of economic data reports this week will be punctuated with interest rate decisions by the US Federal Reserve and the Bank of England. Want to get a better understanding of monetary policy in the Trump era? Join FT economics newsletter writer Chris Giles and his Monetary Policy Radar colleagues on Wednesday for a Q&A on how central banks should navigate the new world order. You can leave your questions in the comments section here.One more thing . . . If you are in Washington this Saturday, do not miss the American edition of the FT Weekend Festival, celebrating my favourite FT days of the week. Speakers include Pink’un wine doyen Jancis Robinson, SkyBridge founder Anthony Scaramucci, author Chimamanda Ngozi Adichie and a clutch of FT political, business and economics columnists. Full details here.And if you want to know what else to do in the US capital next weekend, read the FT Globetrotter guide.What are your plans for the next seven days? Am I missing anything? Email me at [email protected] or, if you are reading this from your inbox, hit reply.Key economic and company reportsHere is a more complete list of what to expect in terms of company reports and economic data this week.MondayMicrosoft closes Skype, the pioneering video-calling service it acquired for $8.5bn 14 years agoMilken Global Conference continues in Los Angeles. US Treasury secretary Scott Bessent is among the listed speakers over the four-day eventCanada, US: S&P Global services purchasing managers’ index (PMI) dataChina: Labor Day holiday continues. Financial markets closedJapan: Children’s Day. Financial markets closedTurkey: April consumer price index (CPI) and producer price index (PPI) inflation rate dataSouth Korea: Birth of the Buddha. Financial markets closedUK: Early May bank holiday. Financial markets closedUS: Conference Board monthly employment indexResults: Clorox Q3, CRH Q1, Cummins Q1, Ford Motor Company Q1, IAC Q1, Loews Q1, Mattel Q1, ON Semiconductor Q1, Tyson Foods Q2, Westpac HYTuesdayChina, Eurozone, France, Germany, India, Italy, UK: S&P Global services PMI dataFrance: INSEE March industrial production indexJapan: Greenery Day public holiday. Financial markets closedSouth Korea: Children’s Day. Financial markets closedUK: April international reserves dataUS: March goods and services trade figuresResults: Archer Daniels Midland Q1, Arista Networks Q1, AXA Q1, Continental Q1, Diamondback Energy Q1, Duke Energy Q1, Electronic Arts Q4/FY, Embraer Q1, Fortune Brands Innovations Q1, Gartner Q1, Geberit Q1, Hugo Boss Q1, IWG Q1, IQVIA Q1, Leidos Q1, Marriott Q1, Philips Q1, Telenor Q1, Williams Q1WednesdayEurozone, France, Germany, Italy, UK: S&P Global/HCOB construction PMI dataEU: March retail trade figuresGermany: March industrial orders dataJapan: au Jibun Bank services PMI dataUS: Federal Open Market Committee interest rate announcementResults: Ahold Delhaize Q1, Arm Holdings Q4/FY, Axon Enterprise Q1, BMW Q1, Bunge Q1, Card Factory FY, Carr’s Group HY, CDW Q1, Disney Q2, DoorDash Q1, Fortis Q1, Flutter Entertainment Q1, Johnson Controls Q2, Legrand Q1, National Australia Bank HY, Pandora Q1, Pitney Bowes Q1, RHI Magnesita Q1 trading update, Skanska Q1, Smiths News HY, Trainline FY, Tripadvisor Q1, Uber Q1, Vistra Q1, Vonovia Q1, JD Wetherspoon Q3 trading statement, Wolters Kluwer Q1ThursdayMaria Ramos becomes Standard Chartered chair, succeeding José Viñals who retires at the conclusion of the company’s annual meetingGermany: March foreign trade figuresJapan: minutes of the March rate-setting meeting publishedUK: Bank of England interest rate announcement and meeting minutes published. Also, Halifax House Price IndexResults: Adecco Q1, Akamai Q1, Anheuser-Busch InBev Q1, ANZ HY, Balfour Beatty AGM and trading statement, Brookfield Q1, ConocoPhillips Q1, Enel Q1, Expedia Q1, Federal Realty Investment Trust Q1, Grafton AGM and trading update, Heidelberg Materials Q1, Helios Towers Q1, Henkel Q1, HgCapital Trust Q1, IMI Q1 trading update, Infineon Q2, InterContinental Hotels Group Q1, Lyft Q1, Match Group Q1, Mondi Q1 trading update, News Corp Q3, Next Q1 trading statement, Nikon FY, Nintendo FY, Paramount Q1, Pinterest Q1, Puma Q1, Rathbones AGM and trading update, Renishaw trading statement, Swisscom Q1, TBC Bank Q1, Toyota FY, Viatris Q1, Warner Bros Discovery Q1, Zurich Insurance Q1FridayBank of England governor Andrew Bailey gives the keynote address at the Reykjavik economic conference 2025, hosted by Northwestern University and the Central Bank of IcelandCanada: April labour market figuresChina: April trade figuresResults: Commerzbank Q1, IAG Q1, Macquarie FY, Nippon Steel Q4, Nippon Telegraph & Telephone FY, Panasonic FY, Rightmove AGM and trading updateWorld eventsFinally, here is a rundown of other events and milestones this week.MondayFrance: rail passengers are set to be hit by industrial action over the early May public holiday. The CGT-Cheminots, SNCF’s largest union, has called for an indefinite strike starting today, pushing for better pay for driversItaly: 58th annual meeting of the Asian Development Bank’s board of governors continues in Milan, the first time Italy is hosting the eventUK: Members of the armed forces will march from Parliament Square, kicking off a week of 80th VE Day anniversary events, including a recitation of Winston Churchill’s victory speech as Big Ben strikes midday, and a military fly-past over central LondonUS: The Costume Institute Benefit, aka the Met Ball, where celebrities parade in front of the cameras, takes place at the Metropolitan Museum of Art, New York. Separately, the 109th annual Pulitzer Prize winners and nominated finalists are announced online for prizes in journalism, drama, letters and musicTuesdayGermany: Friedrich Merz set to be voted as the country’s new chancellor by members of the BundestagHong Kong: Bun Scrambling Final, part of the annual Cheung Chau Bun Festival, in which contestants attempt to scale a 14-metre tower of buns with luck being promised to the person who successfully retrieves the highest bunWednesdayDenmark: Copenhagen Climate Ministerial, co-hosted by Danish climate, energy and utilities minister Lars Aagaard, COP30 president-designate ambassador André Corrêa do Lago and outgoing COP29 president Mukhtar Babayev. Discussions at the two-day meeting will revolve around implementation of last year’s COP29 plans and the key expectations for this year’s COP30Russia: 25th anniversary of Vladimir Putin first being made presidentVatican City: conclave to elect the next pope beginsThursdayVE Day celebrated in various western capitals, 80 years on from the German surrenderUkraine: Putin due to begin a 72-hour ceasefire by the Russian army in its war with the neighbouring stateFridayEU: Europe Day, marking the 1950 declaration by the Luxembourg-born French statesman Robert Schuman proposing a continent united in solidarity, considered the first step towards the EU being formedItaly: 108th annual Giro d’Italia men’s cycling race starts, the first Grand Tour of the season ahead of the Tour de France and Vuelta a EspañaRussia: Victory Day, marking the date when German forces surrendered to the Soviet army in 1945, commemorated with a military parade in Moscow’s Red Square and wreath-laying at the Tomb of the Unknown Soldier. Attendees this year are set to include Slovak Prime Minister Robert Fico and Serbian President Aleksandar Vucic. SaturdayUK: Republic, the group campaigning to abolish the British monarchy, will stage a rally in London’s Trafalgar Square with artists, activist speakers and a 15ft fully mobile Tyrannosaurus rex called Chuck the RexUS: FT Weekend Festival in WashingtonSundayAlbania: general electionAustralia, Canada, US: Mother’s DaySouth Korea: registration deadline for presidential candidates hoping to run in the June 3 electionUK: 2025 Bafta Television Awards ceremony in central LondonUS: SelectUSA Investment Summit begins, hosted by the commerce department at National Harbor, Maryland, aimed at attracting foreign direct investmentRecommended newsletters for youWhite House Watch — What Trump’s second term means for Washington, business and the world. Sign up hereFT Opinion — Insights and judgments from top commentators. Sign up here More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.A Dubai-based family office has announced plans to invest $8.8bn to build a “blockchain and digital assets” financial hub in the Maldives, a scheme the cash-strapped Indian Ocean archipelago hopes will help it through a looming debt crunch.The planned investment led by family office MBS Global Investments over five years would exceed the Maldives’ annual GDP of around $7bn, but Moosa Zameer, finance minister, said the country needed to “take the leap” to diversify away from tourism and fisheries. Debt coming due in the next two years was “the biggest challenge that we have”, Zameer told the Financial Times in a video interview, adding that the deal was “something we see as a potential contributor to bring us out of certain difficulties that we are in”. MBS, which says it manages assets worth approximately $14bn, is the family office of a wealthy Qatari, Sheikh Nayef bin Eid Al Thani. It plans to finance the Maldives investment by tapping its network of family offices and high net worth individuals to form a consortium.MBS’s chief executive Nadeem Hussain said the phased project could be funded through equity and debt and that firm commitments “north of” $4bn-$5bn had already been secured. “We appreciated right from the offset what was involved in terms of funding and we’ve made the necessary alliances and brought in the necessary partners to ensure we have that,” said Hussain. “It is a large sum of money.”MBS and the Maldives government signed a joint venture agreement on the project on Sunday.According to the project master plan, the Maldives International Financial Centre will be a 830,000 sq m hub able to host 6,500 people and provide employment for 16,000 in the capital Malé.A “financial freezone for blockchain and digital assets globally”, it would aim to triple the Maldives’ GDP within four years and generate revenue of “well over $1bn by the fifth year”, the master plan said.The announced investment comes only months after India unveiled a $760mn bailout for the Maldives to stave off a possible sovereign default.In December, rating agency Moody’s noted Maldives’ “external liquidity pressures remain heightened given substantial external debt obligations”, including $600mn-$700mn due this year and around $1bn in 2026, including a $500mn sukuk, a form of debt that follows Islamic strictures against interest.Zameer acknowledged the role India and China had played as “development partners” to his country, but said the financial centre deal offered a new model. “With MBS we are getting into business, it’s going to be a business which is totally different from the traditional models of borrowings that we do,” the finance minister said.The archipelago’s advantages include political stability, good connectivity and proximity to big markets such as India and the Gulf countries. But one senior Indian businessperson said it “won’t be easy” for Malé to become a regional financial centre, particularly given the competition from established hubs such as Dubai and Mauritius. More

When Donald Trump announced this week that American children will have to make do with fewer toys at Christmas, unflattering comparisons were drawn to noted figures from history.“It sounded like Marie Antoinette saying ‘let them eat cake’,” said Whit Ayres, a Republican pollster.Economists and businessmen have been warning for weeks that the president’s 145 per cent tariff on China will raise prices for ordinary Americans. The White House has consistently pushed back on that narrative.But on Wednesday the mask slipped. Trump said China had made a “trillion dollars . . . selling us stuff, [and] much of it we don’t need”.He said people had been warning of empty shelves and “maybe the children will have two dolls instead of 30 dolls . . . and maybe the two dolls will cost a couple of bucks more than they would normally”. But “we have to make a fair deal”, he added.A toy company’s production line in Lianyungang, China. Trump’s comments are part of a flurry of statements from the White House belittling the trade with China More

Unlock the White House Watch newsletter for freeYour guide to what Trump’s second term means for Washington, business and the worldThe US Federal Reserve is widely expected to keep interest rates at their present level when it meets next week, with chair Jay Powell’s press conference likely to be investors’ main focus following a volatile month for financial markets.Donald Trump’s erratic tariff announcements have buffeted US stocks, Treasuries and the dollar in recent weeks while fanning concerns about slower growth and higher inflation in the world’s biggest economy. The president has repeatedly signalled that he thinks interest rates should be lowered to stimulate the economy. Yet data released on Friday showing the US added 177,000 jobs in April, more than economists had expected, bolstered investors’ conviction that the Fed will remain on hold. Traders in swaps markets are currently pricing in close to a 97 per cent chance that rates will remain between 4.25 and 4.5 per cent.Wednesday’s central bank meeting “looks like a placeholder: policy rates on hold and no change in Chair Powell’s tone from his recent speeches,” said Bank of America strategists led by Aditya Bhave.“We think the bar for a June cut is high, but Powell is unlikely to rule it out at this stage,” he added.Trump last month renewed his criticism of the Fed chair, claiming he has the right to fire Powell, who he has lambasted for being “too slow” to lower rates. Asked whether he would sack the central banker, Trump said: “If I want him out, he’ll be out real fast, believe me.”   US stocks and the dollar sold off sharply on the comments as investors worried that the central bank’s independence was under threat only to rebound after Trump rowed back. Powell is likely to sidestep any questions about his relationship with Trump, but his views on the potential impact of the president’s tariffs on inflation and employment will be scrutinised. George SteerWill the Bank of England signal more cuts?Traders are fully expecting the UK’s central bank to reduce its policy rate by a quarter point to 4.25 per cent at its meeting on Thursday, according to levels implied by swaps markets. Most expect three more cuts of the same magnitude to follow before the end of the year.What the Bank of England signals on the inflationary outlook will be crucial to whether those expectations hold. Analysts at Barclays are expecting the bank to cut its inflation forecast, “signalling that the balance of risks has shifted to a less inflationary outlook”. That will “open the door to a June cut without explicitly referencing it, to retain optionality”, they argue.Like other major central banks, the BoE is caught between the growth impacts and inflationary effects of Donald Trump’s stop-start trade war, making any decision to adjust monetary policy in response fraught with difficulty. Recent UK economic data has been mixed, with better than expected retail sales in March but weak readings of business activity.BoE governor Andrew Bailey has warned that the central bank must “take seriously” the risks to growth from the tariff surge. The hawkish rate setter Megan Greene, has said that the effect of global tariffs will probably be disinflationary for the UK.JPMorgan’s Allan Monks is expecting a “dovish shift” from the BoE on the impact of tariffs. “While potential supply chain impacts remain one consideration, weaker growth and an excess supply of Chinese goods may prove more dominant,” he argues, saying currency moves have not added to the inflationary pressures as would have been expected. But he expects the bank to be “cautious” in putting much weight on this disinflationary view. Ian Smith and Valentina RomeiHave stocks passed peak anxiety over tariffs?This week’s rally in global stocks saw Wall Street’s blue-chip S&P 500 recoup all of its sharp losses since Donald Trump’s April 2 announcement of so-called “reciprocal” tariffs roiled markets. After a dramatic 9 per cent drop in the first week of April, US stocks started to regain ground after the president announced a 90-day tariff pause on April 9. David Lefkowitz, Head US Equities at UBS Global Wealth Management said the U-turn “gave us the confidence to re-upgrade equities”.Last week, investors were further cheered by progress towards US-China trade talks, as well strong earnings reports from US tech giants, and encouraging data on the American economy. But the policy environment remains far from certain, with little tangible progress towards trade deals secured. That leaves many analysts feeling nervous about piling back into a market that saw such dramatic falls so recently. The question for equity investors is: is the worst over, or is it still yet to come?The rally is “quite astonishing considering the big shake up of global trade that has happened in the span of four weeks,” said Elyas Galou, senior investment strategist at Bank of America, adding that it “shows that investors remain fundamentally bullish on the outlook for US equities, rates and the dollar”.“The strategy of the Trump administration was to frontload the bad news,” he said “Now the market is frontloading the next 100 days. I think this period will focus on lower taxes, lower tariff rates,” he explained.Others are more cautious. “We think the rally off the lows is more a function of position capitulation than an ‘all clear’ signal for risk,” read a BNP Paribas analysis note, adding that earnings downgrades “could see equities re-test year-to-date low”. Emily Herbert More

This article is an on-site version of Free Lunch newsletter. Premium subscribers can sign up here to get the newsletter delivered every Thursday and Sunday. Standard subscribers can upgrade to Premium here, or explore all FT newslettersWelcome back. Two themes are shaping market sentiment right now. First, Donald Trump’s policy agenda is compromising US economic, financial and institutional superiority. Second, relative stability and political developments are improving the outlook in Europe.Reflecting this, in March, Bank of America’s fund manager survey showed the sharpest rotation out of US stocks and into European equities on record.One theory now being floated as a result of these trends is whether America’s long-term economic growth advantage over the continent has also entered its twilight. For all my recent bearish US and bullish Europe analyses, I think this notion is overstated. Here’s why Europe will not take America’s economic mantle any time soon.First, when it comes to underlying growth rates, the size of the US’s lead over Europe is significant.Fitch Ratings has calculated that over the past 5 to 10 years, America’s potential supply side annual growth rate — factoring in capital, labour and technology — averaged around 2.5 per cent. For the Eurozone it has been closer to 1 per cent. That’s before assessing the impact of policy decisions on both sides of the Atlantic this year.Some content could not load. Check your internet connection or browser settings.Trump’s agenda will crimp US productivity. Tariffs will create inefficiencies. Uncertainty will dent capital investment and research and development. A clampdown on immigration and a possible brain drain would also weaken labour supply.Still, the damage caused by the president would need to be quite extraordinary to permanently erode America’s structural economic growth advantages over Europe, says Andrew Kenningham, chief Europe economist at Capital Economics:“The US has a larger and more unified internal market for scaling, a stronger venture capital ecosystem, more world-class universities and lighter touch regulation.”Indeed, in terms of total inputs, the EU has an advantage in workers, and the US has a lead in physical and financial capital. But America’s growth advantage largely emanates from its higher “total factor productivity”, or how productively its inputs are used.Some content could not load. Check your internet connection or browser settings.In Europe, a growth boost from capital inflows is possible if investors see the continent as an alternative safe haven. But the effect may be limited, not least by investment opportunities.“Whether the rotation into European assets can persist is questionable. Trump’s craziness can accelerate the dollar’s decline as a reserve currency, but the US’s vast capital markets and liquidity mean it will be slow,” says Kenningham.Some content could not load. Check your internet connection or browser settings.So, can Trump do significant — and permanent — damage to this advantage in economic dynamism? That depends on how one expects the remainder of his second term to pan out.There are checks on the administration. The president has already softened his most extreme tariff plans and attacks on the US Federal Reserve’s independence, amid rapidly rising long-term bond yields. Some content could not load. Check your internet connection or browser settings.Broader political pressure will also increase. Year-ahead inflation and unemployment expectations have shot up. Republican consumer confidence, which tends to track approval ratings when Trump is in power, appears to be plateauing.The impact of existing duties, particularly on China, will also soon filter through. “Price increases and shortages in stores will probably be felt from mid-June onwards,” says Paul Donovan, global chief economist for UBS global wealth management. “This will weaken sentiment among more Republican voters.”Some content could not load. Check your internet connection or browser settings.In the coming 12 months, the market expectation is for the US effective tariff rate to ultimately land between a still painful 10 and 20 per cent — from well above 20 per cent now. Business activity will be stymied by ongoing uncertainty. Wall Street now sees a close to 50-50 chance of recession.The Republican party has thin majorities in the House of Representatives and the Senate. “Often the midterms render a second-term president a lame duck. But with higher prices and unemployment likely to be felt by then, that vote may be particularly bad for the Republicans,” notes Matt Gertken, a chief strategist at BCA Research.Some content could not load. Check your internet connection or browser settings.This does not preclude significant damage to the trajectory of US economic growth. Trump might lean on his executive powers even more. Political risk strategists highlight four main threats: undermining Fed independence, a Treasury market crash, capital controls, and somehow legalising a third term (which would enable sustained damage from policy). These could each significantly impair the US economy, and sap its ability to channel inputs as productively over time.But most experts reckon all of these — except threats to the Fed — are low probability events, given financial market, political and legal obstacles. And even if Trump replaces Fed chair Jay Powell with a more pliant central bank chief, Cedric Chehab, chief economist at BMI, notes that other Fed board members and the requisite approval of any new chair by Congress will limit the risk of a significant deviation in monetary policy approach.In all, Capital Economics does not expect the US or Eurozone potential growth rates to change notably from Fitch’s historic estimates in the long run post-Trump. This assumes tariffs settle at 10 per cent on the rest of the world and 60 per cent on China in his term, and that the president’s trade and immigration policies are eventually unwound after he leaves office. It also reflects greater benefits of artificial intelligence accruing to the US relative to Europe. (Deregulation efforts, such as leaner planning rules under Trump, would also be supportive.)How likely is this? Given the trajectory of economic sentiment (and limits to offsetting the negative income effects of import duties with tax cuts, as I assessed in the April 6 edition), a non-Maga presidential election victory is likely in 2028 (though not guaranteed). The past half century of survey data suggests party power tends to change hands when voters feel significantly worse off at the end of a president’s term than they did at the beginning. Barring a more notable tariff climbdown, that seems plausible under Trump.In that case, much of his agenda could be unwound. Uncertainty would lift. Business investment would pick up. And capital would probably flow back to America.Though import levies might be sticky, the economic price of a high tariff wall will probably undermine the policy case for duties over time (as analysed in the March 30 newsletter).Some content could not load. Check your internet connection or browser settings.This does not mean the US economy will spring back to its original growth rate immediately after Trump. Permanent reputational damage is possible (particularly if Maga politics endures). Not all policies might be reversed. But the hit to the US’s underlying growth rate won’t be as strong as perhaps expected.What about Europe’s ability to catch up? “Slow-moving structural factors — such as weak population growth — are difficult to overcome,” says Charles Seville, a senior director at Fitch Ratings. “This puts the onus on investment, productivity growth, and active labour market policies.”Recent shifts in EU economic policy are genuine but should not be overstated. Germany’s defence and infrastructure stimulus will boost growth in the EU’s largest economy, but region-wide capital expenditure is also required. The bloc’s wider rearmament push could boost demand rather than lifting trend productivity growth, particularly if less is spent on cutting-edge tech.Implementing Mario Draghi’s blueprint to raise European productivity — from expediting capital and fiscal union efforts to aligning red tape — will also face hurdles, notes Lorenzo Codogno, a former chief economist at the Italian Treasury department. “The reform process is incremental in normal times. Negotiating across 27 member states remains a battle.”Europe’s near-term growth outlook is itself dented by Trump’s agenda, with the US exporting uncertainty and trade disruption. This risks sapping political bandwidth for reform efforts too. All this suggests the continent won’t be able to make significant inroads on the US’s growth advantage, particularly by the time the president’s term ends.Some content could not load. Check your internet connection or browser settings.So, factoring in America’s current economic lead, Trump’s ability to damage it and European reform efforts, it’s difficult to envisage the US’s growth advantage coming under threat from Europe in the medium term. This may seem counterintuitive given the current newsflow. But recency bias is common when watching the markets. Obvious risks to my outlook include Trump’s unpredictability and the 2028 election.Still, my baseline is for US economic exceptionalism to emerge from Trump 2.0 dented, maybe with permanent reputational damage as investors take a more diversified approach to safe havens and reserve currencies. The EU may look more promising. Nonetheless, the delta between America and Europe’s trend growth rates may be surprisingly little changed. Where do your assumptions differ? Let me know: [email protected] or on X @tejparikh90.Food for thoughtHow much should governments be spending to reduce existential threats from artificial intelligence? This paper does the maths.Recommended newsletters for youTrade Secrets — A must-read on the changing face of international trade and globalisation. Sign up hereUnhedged — Robert Armstrong dissects the most important market trends and discusses how Wall Street’s best minds respond to them. Sign up here More

Millions of single-family homes are underused, on spacious lots. Refitting them for “roommate houses” or backyard cottages could make a difference.Monte Anderson opened a broom closet in his kitchen and pointed to a door handle near a mop and a trash can. Somewhere on the other side lay one small solution to America’s affordable housing crisis.Mr. Anderson is a developer who rehabs commercial and residential buildings in and around Dallas, including the ranch-style house where he lives, for now, with three kind-of-sort-of roommates. The 2,400-square-foot home has been split into four studio apartments. Each has an outdoor entrance, but also connects to another unit through a door like the one in his kitchen closet.The connecting doors are locked and hidden because they’re designed to not be used. The main reason for their existence is that they allow Mr. Anderson to claim he lives in a single-family home, in accordance with local zoning codes, when in reality the home contains four apartments in a country that needs more of them.“This is a suburban retrofit,” Mr. Anderson, 66, said during the tour.Mr. Anderson spent about $1 million renovating the house, which was almost uninhabitable when he bought it. Desiree Rios for The New York TimesEconomists estimate that America needs between four million and eight million more homes. Their prescription is to build a lot of new houses and apartment complexes. It’s a remedy that politicians from both parties agree with in principle, but that is bound to take decades to accomplish.It takes money to buy land, time to secure permits. In the meantime, construction costs have exploded. That’s why most new homes tend to be luxury rentals or higher-cost houses, rather than something a person with a middle or lower income can afford. Those lower-cost units, however, are the ones in the shortest supply.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

The pay stubs tell the story. Hefty deductions to help cover the cost of Kenya’s new funds for affordable housing and health insurance. More money subtracted for jacked-up contributions to the National Social Security Fund and an increase in the tax rate.In a matter of months, Kenyans with a 45,000-shilling-a-month salary — roughly $350 — saw their take-home pay shrink 9 percent, to $262.Pay stubs for an employee at Shining Hope for Communities, a nonprofit in Kenya:JUNE 2024JANUARY 2025“People who are salaried are crying,” said Kennedy Odede, the founder of a self-help association in Nairobi’s Kibera slum.The increased payroll taxes are one element of President William Ruto’s desperate bid to raise revenue to keep the government running and pay off Kenya’s staggering foreign debt.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More